Question

Julie bought a new car in 2012 for $27,500. In the year 2021 , the car was worth $8,800. What was the rate of depreciation of her car? Round your answer to the nearest tenth of a percent.

Answer 1

The rate of depreciation for Julie's car from 2012 to 2021 is approximately 7.6% per year.

Step-by-step explanation:

The rate of depreciation of Julie's car from 2012 to 2021 can be calculated using the formula for annual depreciation rate, which is: Depreciation Rate (%) = [(Initial Value - Final Value) / (Initial Value)] × (100 / Number of Years). Here, Julie's car had an initial value of $27,500 in 2012 and a final value of $8,800 in 2021. The time span over which the car depreciated is 2021 - 2012 = 9 years.

Now, let's do the calculations step-by-step:

1. Calculate the total depreciation: $27,500 - $8,800 = $18,700.
2. Calculate the annual depreciation rate: ($18,700 / $27,500) × 100 = 68%.
3. Finally, divide this rate by the number of years to find the annual rate: 68% / 9 years = approximately 7.556%, which can be rounded to 7.6% to the nearest tenth of a percent.

Therefore, the rate of depreciation per year for Julie's car is 7.6%.