Question

Company

assumes each car in their fleet depreciates by
7% per year. If the initial value of a car is
$37,300.00, in how many years will the value
depreciate to $25,949.18?

Answer 1

Answer: 5 years

Explanation:

A= P(1-r)^t

A= Depreciation value

P = Initial amount

r= rate = 7/100= 0.07

t= time

t= (Ln(A/P))/Ln(1-r)

= (Ln(25949.18/37300))/Ln(1-0.07)

t= 4.999 approximately 5 years