Question

If you spend $250,000 on a new car and it

Answer 1

It will be worth $105468.75.

If it depreciates 25% each year, that means 75% of the value remains.

The value of the third year is $140,625.

$140,625(.75) = $105,468.75.


You could also find 25% of $140,625 and subtract it.

$140,624(.25) = $35,156.25
$140625 - $35,156.25 = $105,468.75.

Either way the car would be worth $105,468.75 in year four!