The general equation for depreciation is given by y = A(1 – r)t, where y = current value, A = original cost, r = rate of depreciation, and t = time, in years. A car was purchased 6 years ago for $25,000. If the annual depreciation rate is 11%, which equation can be used to determine the approximate current value of the car?

Question

KLINLF · Accepted Answer

Y= 25,000(0.89)^6

Damon · Answer

I think you might mean y = A(1 – r)^t y = 25,000 (1-.11)^6 = 25,000(.497) = 12,424.53