Car 1 cost $22,600 when new and depreciated 14% each year for 5 years. The same year, Car 2 cost $17,500 when new and depreciated 7% each year for 5 years. What was the difference in the values of the two cars after 5 years to the nearest dollar? a. $1543 b. $12175 c. $10,631 d. $5100

Hi there

To find the value of the car after 5 years use the formula of

A=p (1-r) ^t

A future value

P present value

R rate of depreciation

T time

Let's first find the value of car 1 after 5 years

A=22,600 * (1-0.14) ^ (5)

A=10,631.65

Second find The value of car 2

A=17,500 * (1-0.07) ^ (5)

A=12,174.55

So the difference

12,174.55-10,631.65=1,542.9

Round your answer to get 1543

Good luck!