Question

Using the values from the graph, compute the values for the terms given in the problem. Choose the correct answer.
Percentage of
Market Value
of Car
(solid line)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Maintenance and Repair Costs
as Percentage of Car's Value
(dashed line)
-
-
-
0
1st
yr.
2nd
yr.
3rd
yr.
4th
yr.
5th
yr.
6th
yr.
7th
yr.
8th
YT.
9th
yr.
10th
yr.
Age of car = 6 years.
Original cost = $12,995.
The current market value is $

Answer 1

The original value of the car of $12,995, and 10% value and 6% repair

cost, give the actual current market value of the car as; $1,234.525.

How can the current value of the car be calculated?

The market value of the car is found as follows;

The age of the car = 6 years

Original market value of the car = $12,995

The percentage of the market value after 6 years = 10%

The percentage of the value used for repairs ≈ 5%

Current market value = Book value - Cost of repair

Book value = $12,995 × 0.1 = $1,299.5

Cost of repair = $12,995 × 0.1 × 0.05 = $64.975

Current market, value = $1,299.5 - $64.975 = $1,234.525

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