A new car depreciates at a rate of 15% per year. What is the expected value of a $25,000 car after 5 years (rounded to nearest whole dollar)?
FV = PV[1 - 15%]^5
FV =25,000 x 0.85^5
FV =25,000 x 0.4437053125
FV =$11,092.63 - expected value of the car after 5 years.
