Question

The value of a new car depreciates (loses value) in many ways. First, a new car candepreciate in value up to 25% once it is purchased and driven off of the car lot. After that thevalue of a car depreciates each year because it is one year older. Let's consider two differentnew cars. What is the value of Car A and Car B immediately after they are purchased after they are punched and drive off the cat lot?

Answer 1

ok

Car A

Immediately after it was purchased = 30000 - (30000)(0.2)

= 30000 - 6000

= $24000

Car B

Immediately after it was purchased = 25000 - (25000)(0.1)

= 25000 - 2500

= $22500