Question

Dan buys a car for £700.

It depreciates at a rate of 5.5% per year.
How much will it be worth in 6 years?
Give your answer to the nearest penny where appropriate

Answer 1

The correct answer is:

£498.53

Answer 2

£469

Explanation:

Given the following

Original cost of car = £700.

Depreciation rate = 5.5%

Depreciation amount after 1 year = 5.5% * 700

Depreciation amount after 1 year = 0.055 * 700

Depreciation amount after 6 year =6 * 38.5 = £231

Worth after 6 years = £700 - £231

Worth after 6 years = £469