Question

Dan buys a car for £700. It depreciates at a rate of 5.5% per year. How much will it be worth in 6 years? Give your answer to the nearest penny where appropriate.

Answer 1

Answer:

$469

Step-by-step explanation:

To find the amount of money that the car loses in value every year, multiply the price of the car by the rate its value depreciates at in decimal form.

The car depreciates at a rate of 5.5% per year. To find 5.5% in decimal form, move the decimal point to left twice. So, 5.5% in decimal form is 0.055.

700 * 0.055 = 38.5

The car loses $38.50 in value every year, so the car's value will depreciate by 6 times that amount in 6 years.

$38.50 * 6 = $231, so the car will lose $231 in value after 6 years.

700 - 231 = 469

The car will be worth $469 in 6 years.