Question

A car was bought for $20,000 and has depreciated at a rate of 10% yearly. Find the price of the car 8 years later.

Answer 1

$4,000

Explanation:

10% of $20,000 is $2,000, which means the price of the car is decreasing by $2,000 each year. After 8 years, the price of the car has decreased by $16,000 ($2,000 times 8 years). The totals cost of the car is now $4,000, as it was originally $20,000, but decreased by $16,000. (20,000-16,000=4,000).