Advanced Math practice question

Answer: B. $14,450

Losing 15% means retaining 85% each year: 20000 × 0.85 × 0.85 = 20000 × 0.7225 = $14,450. Choice A wrongly subtracts a flat 30%; decay compounds, it doesn't add up.

Why the other answers are wrong

A. $14,000

You subtracted a flat 30% (15% twice off the original $20,000). Percent decay compounds: the second year's 15% comes off $17,000, not $20,000.

C. $17,000

That's the value after just one year: 20000 × 0.85 = 17000. You need to apply the 85% factor a second time to reach year 2.

D. $14,700

There's no standard slip that lands on $14,700 — the reliable method is to multiply by the retained fraction each year: 20000 × 0.85 × 0.85 = $14,450.

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