Question

new car is purchased for $16,400.
The value of the car depreciates at 8.25% per year. What will the value of the car be after 10 years?

Answer 1

To find the value of the car after 10 years, we need to calculate the depreciation amount each year and subtract it from the original price.

First, we calculate the annual depreciation amount:
Depreciation amount = Original price * Depreciation rate
Depreciation amount = $16,400 * 8.25%
Depreciation amount = $16,400 * 0.0825
Depreciation amount = $1,353

Now that we have the annual depreciation amount, we can calculate the value of the car after 10 years:
Value after 1 year = $16,400 - $1,353 = $15,047
Value after 2 years = $15,047 - $1,353 = $13,694
...
Value after 10 years = $16,400 - $1,353 * 10 = $16,400 - $13,530 = $2,870

Therefore, the value of the car after 10 years will be $2,870.