Question

A car was valued at $35,000 in the year 1990. The value depreciated to $13,000 by the year 2002.

A) What was the annual rate of change between 1990 and 2002?

B) Assume that the car value continues to drop by the same percentage. What will the value be in the year 2005 ?

Answer 1

14.6328% , $5836.03

Explanation:

Here we are going to use the formula

= 39000

r=?

= 11000

n=8

Hence

Hence r= 0.1463

In percentage form r = 14.63%

Now let us see calculate the value of car in 2003 that is after 12 years

we use the main formula again

= 39000

r=0.1463

= ?

n=12

Hence the car's value will be depreciated to $5840.34 (approx) by 2003.