Question

A car was purchased for $34000.00 and is expected to be worth $12000.00 in 8 years. Determine the rate at which

the van depreciates in value.

Answer 1

Explanation:

Start with the rate the car/van RETAINS each year : r

12 000 = 34 000 (r)^n r = decimal rate of value retention

12 000 = 34 000 ( r)^8

r = .8779

so it RETAINS 87.79% per year

then it LOSES (depreciates) 12.2 % per year