Question

A new truck costs $33,000. The truck's value will depreciate over time, which means it will lose value. For tax purposes, depreciation is usually calculated linearly. If the truck is worth $26,100 after three years, then the value of the truck after 5 years is $____.

Options:
a. $23,400
b. $24,900
c. $25,800
d. $27,300

Answer 1

Based on the linear depreciation calculation, the truck would be valued at $21,500 after 5 years. None of the provided options match this calculated value.

Step-by-step explanation:

To solve for the value of the truck after 5 years, we will use linear depreciation. The value of the truck after 3 years is $26,100, down from the original $33,000. This means the truck has depreciated by $33,000 - $26,100 = $6,900 over 3 years. We can calculate the annual depreciation by dividing this amount by 3, resulting in $6,900 / 3 = $2,300 depreciation per year.

For the next 2 years of depreciation, we subtract 2 times the annual depreciation from the value at year 3: $26,100 - (2 * $2,300) = $26,100 - $4,600 = $21,500.

However, none of the provided options reflect this calculated value of $21,500. It's possible there may have been a misprint in the options or the initial conditions. Based on the standard linear depreciation calculated, none of the provided options a) $23,400 b) $24,900 c) $25,800 d) $27,300 are correct.