Question

A new car sells for $22,000. The rate of depreciation is 15% annually. After 6 years, the owner decides to sell the car. What is the value of the car? Round to the nearest cent.

Answer 1

The answer is 2,200.

Explanation:

First, you must know by how much the car is depreciating by, in money. Multiply 22,000 by 0.15. That is 3,300. This is how much it depreciates by each year. Now, multiply this by 6 (years) and you get a whopping 19,800! This is how much it has depriciated in 6 years from the original sale. Now subtract 22,000-19,800 and you get 2,200. This is how much the car is worth 6 years from the original sale. So the value of the car is now $2,200. Yikes. Hope this helps!