Question

if a new truck is valued at $39,400, what will its value be in 4 years if it depreciates 11.15 each year? Round your answer to the nearescenti necessary

Answer 1

The initial value of the truck is $39,400

It depreciates 11.1% each year, then after 1 year the new value is:

`\begin{gathered} V1=39400-39400\cdot\frac{11.1\text{ \%}}{100\text{ \%}}=39400-4373.4 \\ V1=35026.6 \end{gathered}`

Now, let's evaluate in year 2:

`\begin{gathered} V2=35026.6-35026.6\cdot\frac{11.1\text{ \%}}{100\text{ \%}}=35026.6-3887.95 \\ V2=31138.65 \end{gathered}`

Year 3:

`\begin{gathered} V3=31138.65-31138.65\cdot\frac{11.1\text{ \%}}{100\text{ \%}}=31138.65-3456.39 \\ V3=27682.26 \end{gathered}`

And in 4 years its value will be:

`\begin{gathered} V4=27682.26-27682.26\cdot\frac{11.1\text{ \%}}{100\text{ \%}}=27682.26-3072.73 \\ V4=24609.53 \end{gathered}`

The answer is $24609.53