Question

A car's starting price is $6,500, and it depreciates at a rate of 10% every year. After 2 years, what is the value?

Why will a car's value never be $0?

(pls answer quickly I have a test tmrw)

Answer 1

Initial value of the car is $6,500. Depreciates rate is 0.10 each year, after 2 years is 0.20.
First year depreciation: $6,500 - $650 = 5,850

Second year depreciation: $5,850 - $585 = $5,265

Therefore, the value of the car after 2 years with a 10% depreciation rate per year would be approximately $5,265.