Question
A vehicle purchased for $27500 depreciates at a constant rate of 7% per year. Determine the approximate value of the vehicle 14 years after purchase.
Answers
GPT 3.5
To determine the approximate value of the vehicle 14 years after purchase, we can use the formula for depreciation:
Value = Purchase Price * (1 - Depreciation Rate)^Number of Years
Where:
- Purchase Price is $27,500
- Depreciation Rate is 7% or 0.07
- Number of Years is 14
Substituting these values into the formula, we have:
Value = $27,500 * (1 - 0.07)^14
Simplifying the equation, we have:
Value = $27,500 * (0.93)^14
Calculating this using a calculator, we find:
Value ≈ $10,396.04
Therefore, the approximate value of the vehicle 14 years after purchase is $10,396.04.
Value = Purchase Price * (1 - Depreciation Rate)^Number of Years
Where:
- Purchase Price is $27,500
- Depreciation Rate is 7% or 0.07
- Number of Years is 14
Substituting these values into the formula, we have:
Value = $27,500 * (1 - 0.07)^14
Simplifying the equation, we have:
Value = $27,500 * (0.93)^14
Calculating this using a calculator, we find:
Value ≈ $10,396.04
Therefore, the approximate value of the vehicle 14 years after purchase is $10,396.04.