Question

Ella purchased a used vehicle that depreciates under a straight-line method.

The initial value of the car is $8500, and the salvage value is $500. If the car
is expected to have a useful life of another 5 years, how much will it be worth
2 years?
in
OA. $5300
OB. $4800
OC. $6900
OD. $7500

Answer 1

Ella's used vehicle will be worth $5300 after 2 years, calculated using the straight-line method of depreciation.

Step-by-step explanation:

To determine the value of Ella's car after 2 years, we need to use the straight-line method of depreciation. This method spreads the depreciation evenly over the useful life of the vehicle. We'll calculate the annual depreciation first and then apply it to find the car's value after 2 years.

1. Find the total depreciation by subtracting the salvage value from the initial value: $8500 - $500 = $8000.
2. Calculate the annual depreciation: $8000 (total depreciation) ÷ 5 (useful life in years) = $1600 per year.
3. Determine the depreciation after 2 years: 2 years * $1600/year = $3200.
4. Subtract the total depreciation after 2 years from the initial value to find the car's worth: $8500 - $3200 = $5300.

Therefore, the used vehicle will be worth $5300 after 2 years.