Question

Tyler bought a truck for $54,000. After 5 years, the value of the truck depreciated to $28,000. Assuming a consistent annual decay rate, what would be the projected value of the truck 10 years from the time it was purchased?

A) $14,000
B) $7,000
C) $15,000
D) $14,500

Answer 1

The projected value of the truck 10 years from the time it was purchased would be 2,000.

Step-by-step explanation:

To find the projected value of the truck after 10 years, we need to determine the annual decay rate. From the given information, we know that the truck depreciated from 54,000 to 28,000 in 5 years. This means that the truck's value decreased by 54,000 - 28,000 = 26,000 in 5 years. Therefore, the annual decay rate can be calculated as 26,000 / 5 years = 5,200 per year.

To calculate the projected value after 10 years, we can subtract the annual decay rate multiplied by 10 from the initial value of 54,000. So, the projected value after 10 years would be 54,000 - (5,200 * 10) = 54,000 - 52,000 = $2,000.

Therefore, the projected value of the truck 10 years from the time it was purchased would be 2,000.