Question

the value of a new automobile depreciates 15% during the first year, and 16% during the second year. What is its depreciated value at the end of the second year if its original cost was $15,000

Answer 1

It starts at 100% - 15% = 85% after the first year. $15,000*0.85 = $12,750
The second year is further reduced 100% - 16% = 84%
$12,750*0.84 = $10,710