### Home > INT2 > Chapter 7 > Lesson 7.1.1 > Problem7-21

7-21.

The principal’s new car cost $35{,}000$, but in three years it will only be worth $21{,}494$. Write an equation for this situation and explain what each part of the equation represents in the context of the problem. What is the annual rate of depreciation?

Recall: $y = a(1 + r)^t$

$y =$ value of car after number of years
$a =$ original amount
$r=$ rate
$t =$ number of years

Substitute the values given and solve for $r$.