Question

What is the total percentage loss (to the nearest integer) in the value of the car at the end of 2 years if its value decreases at a steady rate of 10% each year?

Answer 1

The value of the car loses 10% annually at a steady pace. This means, we have to calculate the loss percent for two consecutive years.

For simplicity, let's assume that the car's initial value is 100%.

After the first year, the value of the car gets reduced by 10%, so now it's 90%.

In the second year, the value of the car drops by another 10%. However, this 10% is not from the original value (100%), it's from the remaining 90%. So, we lose 10% of 90% which gives us 9%.

Therefore, the total value the car has lost after two years is found by adding the values it lost each year. So, 10% (from the first year) + 9% (from the second year) gives us 19%.

So, the car has lost 19% of its original value after two years.