Question

In the year 2007, a person bought a new car for $14000. For each consecutive year after that, the value of the car depreciated by 9%. How much would the car be worth in the year 2011, to the nearest hundred dollars

Answer 1

We will use the dedepriciation formula;

$A\text{ = P}(1-\frac{r}{100})^T$

where A = value of the car after 5 years

P = current value of the car

r = depretiation rate

t = time in years

From the question,

P = $14 000

r = 9

Count the years from 2007 to 2011 starting from 2008 to get the number of years

t =4

Substitute the values into the formula

$A=\text{ 14000(1-}\frac{9}{100})^4$$A=14000(1-0.09)^4$$=14000(0.91)^4$$=9600.49$

Therefore the car will worth $9600 to the nearest hundred dollars