Question

A car depreciates by 5% in a year. If the initial value was $10,000, what is its value after a year?

Answer 1

$ 9500

Explanation:

From the question given above, the following data were obtained:

Initial value = $ 10000

Depreciation rate = 5%

Value after one year =?

Next, we shall determine the depreciation value. This can be obtained as follow:

Initial value = $ 10000

Depreciation rate = 5%

Depreciation value =?

Depreciation value = Initial value × rate

Depreciation value = 10000 × 5%

Depreciation value = 10000 × 5/100

Depreciation value = $ 500

Finally, we shall determine the value of the car after one year. This can be obtained as follow:

Initial value = $ 10000

Depreciation value = $ 500

Value after one year =?

Value after one year = Initial value – Depreciation value

Value after one year = 10000 – 500

Value after one year = $ 9500

Therefore, the value of the car after one year is $ 9500

Answer 2

Answer: $9,500

Explanation:

If the value of the car depreciates by 5% in a year it means that the value of the car reduced by 5%.

First find the 5%:

= 5% * 10,000

= $500

Subtract this from the initial value to find the value after a year:

= 10,000 - 500

= $9,500