Question

A car is purchase at $20000.The value of the car depreciates at 12.5% a year. What will the value of the car be to the nearest cent after 11 years

Answer 1

Answer: $4603.82

Step-by-step explanation:

Given

The initial cost of a car is $P=\ 20,000$

The rate of depreciation is $i=12.5\%$

Depreciated value after n years is given by

$\Rightarrow P(1-\frac{i}{100})^n\quad \text{where n=no. of years}$

Value after 11 years

$\Rightarrow 20,000(1-\frac{12.5}{100})^{11}\\\\\Rightarrow 20000(0.875)^{11}=\ 4603.82$