Question

You buy a car for $8000 that depreciates (loses value) at a rate of 11% a year. How much is the care

worth after 5 years?

Answer 1

$3600

Explanation:

Cost of the car = $8000

The car loses value at 11% each year .

That’s

11% /100% x $8000

0.11 x 8000

$880

11% decrease each year means that the cost of the car is reduced by $880 per year.

Therefore,

Worth of the car in 5 years

= $8000 - ($880 x 5)

= $8000 - $4400

= $3600

The car will be worth $3600 in five years