Question

A car is purchased for £11 500 In its first year, the value of the car will depreciate by 15%. Each year after that, the value of the car will depreciate by 10%. What is the value of the car at the end of 3 years?

Answer 1

Value of the car at the end of 3 years is £7917.75

Explanation:

The car is purchased for £11500.

In the first year, 15% depriciation.

So, depreciation on first year =11500 *
`(15)/(100)` =1725

After first year depreciation the value of car =11500-1725 =£9775

Now, second year depreciation is 10%

So, 10% of 9775 =0.10*9775 =977.5

Value of car after 2 years = 9775 -977.5 =8797.5

Now, for third year depreciation is 10%.

So, depreciation on 3 year = 10% *8797.5

=0.10*8797.5

=879.75

So, value of car after 3 years = 8797.5 -879.75 =£7917.75