Question

The value V of an item after t years is given by the following formula, assuming linear depreciation,V = C - Crt.where C is the original cost and r is the rate of depreciation expressed as a decimal.If you buy a car for $7191 and it depreciates linearly at a rate of 5% per year, what will be its value after 9 months? Round youranswer to the nearest cent.

Answer 1

Here C=$7191

r=0.05

t=9 months=0.75 years

The value of the car will be

`V=7191-7191*0.05*0.75\Rightarrow V=7191-269.6625\Rightarrow V=6921.34`

Hence the value of the car will be $6921.34.