Based on her past experiences, a homeowner estimates that appliances lose 22% of their resale value each year. If her estimate is accurate, how much will an appliance currently valued at 1,496 be worth in 10 years?

Solution

Based on her past experiences, a homeowner estimates that appliances lose 22% of their resale value each year. If her estimate is accurate, how much will an appliance currently valued at 1, 496 be worth in 10 years?

Solution

Principal : 467.5

Solution steps

Translate the problem into an equation:

1496 = P (1 + 0.22 \cdot 10)

Solve for

P, 1496 = P (1 + 0.22 \cdot 10) : P = 467.5

Principal : 467.5

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