Question

You buy a new Chevy Camaro for $32,820 in 2014. This car will depreciate (decrease in value) by an average of 7% per year. Predict what the value of this truck will be in the years 2017, 2019, 2021, 2024, and 2029.

Answer 1

2017 = $26,399

2019 = $22832.49¢

2021 = $19,747.82¢

2024 = $15,884.30¢

2029 = $11,050.52¢

Explanation:

Please kindly check the attached file for explanation

Answer 2

$26398.997

$22,832.492

$19,747.822

$15884.299

$11050.522

Explanation:

Given the following:

Purchase price (P)= $32,820

Average depreciation rate per year (r) = 7% = 0.07

Purchase year= 2014

Price in 2017:

t = 3

Value(V) = P(1 - r)^t

V = 32820(1-0.07)^3

V = 32820(0.93)^3 = $26398.997

Price in 2019:

t = 5

Value(V) = P(1 - r)^t

V = 32820(1-0.07)^5

V = 32820(0.93)^5 = $22,832.492

Price in 2021:

t = 7

Value(V) = P(1 - r)^t

V = 32820(1-0.07)^7

V = 32820(0.93)^7 =$19,747.822

Price in 2024:

t = 10

Value(V) = P(1 - r)^t

V = 32820(1-0.07)^10

V = 32820(0.93)^10 = $15884.299

Price in 2019:

t = 15

Value(V) = P(1 - r)^t

V = 32820(1-0.07)^15

V = 32820(0.93)^15 = $11050.522