Question

Colin buys a car for £31300.

Answer 1

Answer:

The car will be worth £28,870.12 in 4 years

Step-by-step explanation:

The equation for the value of the car after t years has the following format:

$V(t) = V(0)(1-r)^{t}$

In which V(0) is the current value, and r is the annual constant depreciation rate.

Colin buys a car for £31300. It depreciates at a rate of 2% per year.

This means that $V(0) = 31300, r = 0.02$

So

$V(t) = V(0)(1-r)^{t}$

$V(t) = 31300(1-0.02)^{t}$

$V(t) = 31300(0.98)^{t}$

How much will it be worth in 4 years?

This is V(4).

$V(t) = 31300(0.98)^{t}$

$V(4) = 31300(0.98)^{4} = 28870.12$

The car will be worth £28,870.12 in 4 years