A new motorhome costs $75,000. It is expected to depreciate 7% each year. Find the value of the motorhome in 5 years.
FV=PV [1 - .07]^5
FV=75,000 x .93^5
FV=$52,176.63 - its value after 5 years.
If it depreciates at 7% per year, then its value the subsequent year is only 93% of that of the previous year........so.....the value after five years =
75000 * (.93)^5 = about $52,176.63