Chapter 6.2, Problem 168E

Depreciation Once a new car is driven away from the dealer, it begins to lose value. Each year, a car loses 10% of its value. This means that each year the value of a car is 90% of the previous year’s value. If a new car was purchased for $20,000, the value at the end of the first year would be $20000(0.90) and the value of the car after the end of the second year would be $20000(0.90)². Complete the table shown below. What will be the value of the car at the end of the eighth year? Simplify the expression, to show the value in dollars.