Question

Ms. Hamm bought a new car for $37,500. It is said that her car depreciates at a rate of 7% each year

Answer 1

This would mean that the next year her car's value would go down by $2,625. The new value of the car would consequently be $34,875.

Explanation:

Here is how you can solve this problem:

• Okay, so first, let's find 7% of $37,500. To do this, the simple way would be to find first 1% of $37,500.

• 1% of $37,500 is $375. This is because you are moving the decimal point two spaces to the left.

Now that we know that 1% of $37,500 is $375, let's multiply this value by 7.

• 375 x 7 = 2625.

• Subtract 2625 from 37,500.

• You will get $34,875.

Let's say that the next year, her car value goes down by 7% again.

THIS IS THE IMPORTANT PART:

YOU FIND 7% OF THE NEW VALUE, NOT $37,500. YOU WOULD FIND 7% OF $34,875.

Hope this helps! :)