Answer:
$10,100
Explanation:
You want to know the book value after 3 years of a car purchased for $11,900 that has a resale value of $8,300 after 6 years.
Depreciation
The depreciation each year will be the difference in starting and ending values, divided by the number of years of useful life.
annual depreciation = ($11,900 -8,300)/(6 years)
= $3600/(6 years) = $600/year
After 3 years, the value has depreciated by 3 × $600, so the remaining book value is ...
$11,900 -1,800 = $10,100
The book value of the car after 3 years is $10,100.
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Additional comment
There are other ways to calculate depreciation on an item not used for production, including the declining balance method, the double declining balance method, and the sum of years digits. The straight-line method used here seems most applicable for this situation.
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