Question

Last year Mr. Caton bought a new car for $13,995. At the end of the year the value of the car decreased by 20%. Calculate:

(a) the decrease;
(b) the present value of the car.

Answer 1

To calculate the decrease in the car's value, multiply the original price by the decrease percentage. The present value of the car is the original price minus the decrease.

Step-by-step explanation:

To calculate the decrease in the value of Mr. Caton's car, we need to multiply the original price of the car by the decrease percentage. The decrease is 20%, so the decrease in value is $13,995 * 0.20 = $2,799.

To find the present value of the car, we need to subtract the decrease from the original price. The present value of the car is $13,995 - $2,799 = $11,196.