Question

you bought a new car for $17,896. as you drive off the lot , the car depreciates by 6.3%. what will the value of the car be in 9 years ?

Answer 1

Answer: at the end of year 9 the car value would be $9963,5

Step by step:

Every year you lose 6.30% of the last value, so from the last year's value you take out another 6.3%.

every year the formula is the same, so based on first year it would be:

$17896 * (100%-6.3%) = $17896 * 93.5% = $16768.6

year 1 17896,0 6,30%

year 2 16768,6 6,30%

year 3 15712,1 6,30%

year 4 14722,3 6,30%

year 5 13794,8 6,30%

year 6 12925,7 6,30%

year 7 12111,4 6,30%

year 8 11348,4 6,30%

year 9 10633,4 6,30%

end of year 9 = 9963,5