Question

A new car is purchased for $43,000 and over time its value depreciates by one half every 6 years. What is the value of the car 29 years after it was purchased, to the nearest hundred dollars?

Answer 1

$1,567.62

Explanation:

If the car depreciates 50% every 6 years, we can do the following:

$43,000 ÷ 2(year 6) = $21,500

$21,500 ÷ 2(year 12) = $10,750

$10,750 ÷ 2(year 18) = $5,375

$5,375 ÷ 2(year 24) = $2,687.5

Now, for us to know how much it depreciates in 5 years to reach 29 years:

50% = 0.5 = 1/2 ÷ 6years = 0.0833 annually * 5years = 0.4167

$2,687.5 * 0.4167 = $1,119.88

$2,687.5 - $1,119.88 = $1,567.62 is the value of the car 29 years after!