Question

The formula for finding the present value of an item that depreciates yearly is v=c-crt. In this​ formula, v is the present​ value, c is the original​ cost, r is the rate of depreciation per​ year, and t is the number of years that have passed. After 4 ​years, what is the value of a car originally costing ​$30,000 that depreciated at a rate of 0.1 per​ year?
The value of the car after 4 years is ​$?

Answer 1

Answer:

The value of the car after 4 years is ​$18,000

Step-by-step explanation:

Formulas

The model used to compute the present value of an item that depreciates yearly is

$v=c-c.r.t$

Where v is the present​ value, c is the original​ cost, r is the rate of depreciation per​ year, and t is the number of years that have passed.

We are required to find the value of a car originally costing c=​$30,000 that depreciated at a rate of r=0.1 per​ year after t= 4 years

We plug in the given data

$v=30,000-30,000\cdot 0.1\cdot 4$

$v=30,000-12,000$

$v=18,000$

The value of the car after 4 years is ​$18,000