Question

A car is purchase at $20000.The value of the car depreciates at 12.5% a year. What will the value of the car be to the nearest cent after 11 years

Answer 1

Answer: $4603.82

Explanation:

Given

The initial cost of a car is
`P=\$20,000`

The rate of depreciation is
`i=12.5\%`

Depreciated value after n years is given by

`\Rightarrow P(1-(i)/(100))^n\quad \text{where n=no. of years}`

Value after 11 years

`\Rightarrow 20,000(1-(12.5)/(100))^(11)\\\\\Rightarrow 20000(0.875)^(11)=\$4603.82`