Question

A new car costs $18000 and loses 11% of its value each year.

(a) Find the depreciation (loss of value) in dollars in the third year. First year depreciation: $ 1980.00 Second year depreciation: $ 1762.20 Third year depreciation: $
(b) Give a formula for dn, the depreciation in the nth year. Hint: It might be helpful to note that if 11% of the value is lost, then 89% of the value remains. dn =

Answer 1

The depreciation in the third year is $1568.36. The formula for the depreciation in the nth year is dn = 0.11 * (0.89^(n-1)) * 18000.

Step-by-step explanation:

(a) To find the depreciation in the third year, we need to calculate 11% of the value of the car after two years. In the first year, the car loses $1980.00, and in the second year, it loses $1762.20. So, the value of the car after two years is $18000 - $1980 - $1762.20 = $14257.80. Now, we can calculate the depreciation in the third year by finding 11% of $14257.80. The depreciation in the third year is therefore $1568.36.

(b) The formula for the depreciation in the nth year is dn = 0.11 * (0.89^(n-1)) * 18000, where n represents the year.