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how much is a car worh in its forth year if it is depreciated by 25% based on it's value of $140,625 in the third year

User AlexNoir
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1 Answer

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Answer: $79,101.56

Explanation:

To calculate the value of the car in its fourth year after a depreciation of 25%, you can follow these steps:

1. Determine the depreciation amount in the third year:

Depreciation = Initial Value × Depreciation Rate

Depreciation = $140,625 × 0.25 = $35,156.25

2. Subtract the depreciation amount from the initial value to find the value at the end of the third year:

Value at the end of the third year = Initial Value - Depreciation

Value at the end of the third year = $140,625 - $35,156.25 = $105,468.75

3. Apply the 25% depreciation to the value at the end of the third year to find the value in the fourth year:

Depreciation in the fourth year = Value at the end of the third year × Depreciation Rate

Depreciation in the fourth year = $105,468.75 × 0.25 = $26,367.19

4. Subtract the fourth-year depreciation from the value at the end of the third year to find the value in the fourth year:

Value in the fourth year = Value at the end of the third year - Depreciation in the fourth year

Value in the fourth year = $105,468.75 - $26,367.19 = $79,101.56

Therefore, the car is worth approximately $79,101.56 in its fourth year after being depreciated by 25% based on its value of $140,625 in the third year.

User Fletcher Moore
by
8.2k points

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