Question

A new car costs $15,500 on average. It loses 11% of its value the moment it is driven off the lot. Once John drives his new car off the lot, what will its value be?

A. $17,345
B. $13,795
C. $13,795
D. $18,345

Answer 1

To find the car's value after an 11% depreciation, subtract 11% of the original $15,500 price from itself, resulting in a new value of $13,795.

Step-by-step explanation:

The question presents a scenario where a car, which costs $15,500 on average, loses 11% of its value as soon as it is driven off the lot. To calculate the new value of John's car after this depreciation, we multiply the original price by the remaining percentage of value (100% - 11% = 89%).

The calculation steps are as follows:

• Determine the amount of depreciation: 11% of $15,500 = 0.11 * $15,500 = $1,705.
• Subtract the depreciation from the original price: $15,500 - $1,705 = $13,795.

Hence, once John drives his new car off the lot, its value will be $13,795, which corresponds to option B.