Question

a 2014 mustang originally costs $25000.00 and depreciates at a rate of 8% per year. What is the cost of the car after 7 years?

Answer 1

$11,000 will bet the cost in 7 years

Given:

Original cost: $25,000

Depreciation rate: 8%

Term: 7 years

Formula for Depreciation:

A = C ( 1 - ( r ) (t) )

A = Future Value

C = Original Cost

r = rate

t = term

Solution:

Substitute the given values to the formula for depreciation.

A = $25,000( 1 - ( 0.08)(7))

A = $25,000( 1 - .56 )

A = $25,000(0.44 )

A = $11,000