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A certain car’s price decreased by 2.5% (from the original price) each year from 1996 to 2002, during that time the owner of the car invested in a new carburetor and a new audio system for the car, which increased her price by $1,500. If the price of the car in 1996 was $22,000, what is the car’s price in 2002?
  • a)
    $18,400
  • b)
    $19,500
  • c)
    $20,200
  • d)
    $20,400
  • e)
    $21,100
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
A certain car’s price decreased by 2.5% (from the original price...
The best answer is C.
The price of the car decreased by 2.5% every year on a course of 6 years. That means that the price of the car in 2002 is 15% lower than the original + $1500 of new investments.
The new price is ($22,000 x 0.85 = 18,700 + 1500 = $20,200).
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Most Upvoted Answer
A certain car’s price decreased by 2.5% (from the original price...
Given information:
- Original price of the car in 1996: $22,000
- Price decreased by 2.5% each year from 1996 to 2002
- The owner invested in a new carburetor and a new audio system, increasing the price by $1,500

Calculating the price in 2002:
- Calculate the price after 6 years (from 1996 to 2002) considering a 2.5% decrease each year:
$22,000 * (1 - 0.025)^6 = $22,000 * (0.975)^6 ≈ $20,204.20
- After investing in the new carburetor and audio system, the price increases by $1,500:
$20,204.20 + $1,500 = $21,704.20
Therefore, the car's price in 2002 is approximately $20,200, which corresponds to option C.
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