199k views
1 vote
The value of a car is decreasing by 14% per year. If the car is worth 11,000 today, what will it be worth in two years?

User TiQP
by
8.8k points

1 Answer

4 votes

For us to be able to determine the worth of the car in two years, we will be using the depreciation formula:


\text{ FV = PV(1 - }(r)/(100))^n

Where,

PV = Current value of the car

r = rate of interest

n = number of years

FV = Future value

Given:

PV = 11,000

r = 14%

n = 2 years

We get,


\text{ FV = PV(1 - }(r)/(100))^n
\text{= (11,000)(1 - }(14)/(100))^2
\text{= (11,000)(1 - }0.14)^2
\text{= (11,000)(}0.86)^2
\text{= (11,000)(}0.7396)
=\text{ 8,135.60}

Therefore, the answer is 8,135.60

User Nybon
by
7.9k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories