Explanation: The car was originally bought at $25,000 and was depreciated over 5 years by $1,500 a year. Over 5 years, the car would be depreciated by a total of $7,500 because $1,500 x 5 years equals $7,500 in total. Since you would distract the total depreciation cost from the original value to find the current value of the car, after 5 year of use, the car would be worth $17,500.
