Answer:
The annual depreciation rate was 6.4816%. In 2004 the value of the car will be fully amortized, worth $ 0.
Step-by-step explanation:
Given that a car was valued at 45,000 in the year 1992, and the value depreciated to 10,000 by the year 2004, to determine what was the annual rate of change between 1992 and 2004, and assuming that the car value continues to drop by the same percentage, to determine what will the value be in the year 2009, the following calculations must be performed:
45,000 = 100
10,000 = X
10,000 x 100 / 45,000 = X
22.22 = X
100 - 22.22 = 77.78
2004 - 1992 = 12
77.78 / 12 = 6.4816
6.4816 x 5 = 32.4083
22.22 - 32.40 = -10.1883
Therefore, in 2004 the value of the car will be fully amortized, worth $ 0.
