Question

From the following information, determine the average yearly depreciation.

Choose the right answer. Cost of used car = $3,000.00
Years driven = 6
Trade-in value =$1,250.00

Average yearly depreciation is $?

Answer 1

Average Yearly Depreciation = 291.67

Answer 2

Average yearly depreciation of the car is $291.67

Explanation:

Cost of the used car = $3000

Trade in value of the car is given as $1250.

Duration for which the car was used = 6 years

Total depreciation in the price of the car = Cost of the car - price of the car at which car is being traded

So total depreciation = 3000 - 1250 = $1750

Average yearly depreciation = Total depreciation ÷ Years driven

Average depreciation =
`(1750)/(6)=291.67`

Therefore average yearly depreciation $291.67 is the answer.