Question

Bernice's Camaro was purchased for $43,000. It will depreciate at 17% per year. What will the car be worth when she pays it off 6 years later?

a) $18,652
b) $12,335
c) $14,896
d) $20,114

Answer 1

The car will be worth $13,944 when Bernice pays it off.

Step-by-step explanation:

To calculate the value of the car after 6 years, we need to find the value of the car after each year of depreciation and then subtract that amount from the original price of $43,000. The formula to calculate the value after each year is:

Value after n years = Original Price * (1 - Depreciation Rate)^n

Plugging in the values for our problem:
Value after 1 year = $43,000 * (1 - 0.17)^1 = $35,690
Value after 2 years = $43,000 * (1 - 0.17)^2 = $29,677
Value after 3 years = $43,000 * (1 - 0.17)^3 = $24,561
Value after 4 years = $43,000 * (1 - 0.17)^4 = $20,310
Value after 5 years = $43,000 * (1 - 0.17)^5 = $16,821
Value after 6 years = $43,000 * (1 - 0.17)^6 = $13,944

Therefore, after 6 years, the car will be worth $13,944. The correct answer is d) $20,114.