Question

The value of a boat if depreciating at at a rate of 9% per year. In 2006 the boat was worth $17,800. Find the worth of the boat in 2013.

Answer 1

The worth of boat in 2013 will be $9202.6

Explanation:

Rate of depreciation = 9% = 0.09

Cost of Boat in 2006 =$ 17,800

Cost of Boat in 2013 = ?

Years = 2013-2006= 7 years

The formula used is:
`\mathbf{A=P(1+r)^(t)}`

Since the value of boat is depreciating the value of r will be r=-0.09

Here P = 17,800 , r=-0.09 and t = 7 years Finding A

`A=P(1+r)^(t)\\A=17,800(1+(-0.09))^7\\A=17,800(0.91)^7\\A=17,800(0.517)\\A=9202.6`

So, the worth of boat in 2013 will be $9202.6