How to determine the value using compound interest

The video tutorial explains how to calculate the depreciation of a car that originally costs $18,000 and depreciates by 25% annually over four years. The teacher guides students through the process of identifying the initial amount, understanding the concept of depreciation as a decay process, and using a mathematical model to calculate the car's value after four years. The final calculation shows the car's value as $5,695, highlighting the significant impact of a 25% annual depreciation rate.

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