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.

Answer 1

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.