Question

Sarah bought her car for $17,440. it is expected to depreciate an average of 14% each year during the first 6 years. what will the approximate value of her car be in 6 years?

Answer 1

Given that the value of the bought car depreciates by 14%, its value is only 86% of its value from the previous year. With the known equation,
                            V = P x (1-d)^n
Where V is the current value, P is the original value, d is the depreciation rate, and n is the number of years. Substituting,
                          V = ($17,440) x (1 - 0.14)^6
                              = $7055.65
Thus, after 6 years, the car would only be $7055.65.