A new car costs $64 000. It depreciates by 25% in the first year, 20% in the second year, and 15% in each of the following years. Find the value of the cat to the nearest $50 after 4years.
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1 Answers
To find the value of the car after 4 years, considering its depreciation, you can calculate each year’s depreciation and subtract it from the previous year’s value. Here’s how you can do it step by step:
- First Year: The car depreciates by 25% in the first year. To find the value after the first year, you can calculate 25% of $64,000 and subtract it from the original price:
Depreciation in the first year = 25% of $64,000 = 0.25 * $64,000 = $16,000
Value after the first year = $64,000 – $16,000 = $48,000 - Second Year: The car depreciates by 20% in the second year. To find the value after the second year, calculate 20% of $48,000 and subtract it from the value after the first year:
Depreciation in the second year = 20% of $48,000 = 0.20 * $48,000 = $9,600
Value after the second year = $48,000 – $9,600 = $38,400 - Third Year: In each of the following years, the car depreciates by 15%. To find the value after the third year, calculate 15% of $38,400 and subtract it from the value after the second year:
Depreciation in the third year = 15% of $38,400 = 0.15 * $38,400 = $5,760
Value after the third year = $38,400 – $5,760 = $32,640 - Fourth Year: Similarly, for the fourth year, calculate 15% of $32,640 and subtract it from the value after the third year:
Depreciation in the fourth year = 15% of $32,640 = 0.15 * $32,640 = $4,896
Value after the fourth year = $32,640 – $4,896 = $27,744
So, after 4 years, the value of the car is approximately $27,744. Rounded to the nearest $50, the value is approximately $27,750.
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