Doug bought a new car for $25,000. He estimates his car will depreciate, or lose value, at a rate of 20% per year. The value of his car is modeled by the equation V = P(1 – r)^t, where V is the value of the car, P is the price he paid, r is the annual rate of depreciation, and t is the number of years he has owned the car.
According to the model, what will be the approximate value of his car after 4 1/2 years?
A. $2,500
B. $9,159
C. $22,827
D. $23,791