Hello,
6b) (i) As you can see, in the first year the price drops from 27,000 to 17,000. (Look at year 0-1 on the x axis). To find the percentage drop, find the difference between the two values and divide it over the initial value of 27,000.
So, the percentage drop in the first year is:
(27000-17000) / (27000) = 0.37, or a 37% drop
The answer is 37%.
(ii) For this question, we basically have the same process as the previous question except for the second year.
From year 1 to year 2, the value starts at 17,000 and ends at 15,000.
To find the percentage drop, we do:
(17000 - 15000) / (17000) = 0.118 ≈ 0.12, or a 12% drop
The answer is 12%.
6c) To find the percentage depreciation over the first 5 years, we look at the initial value (x = 0) and the value after 5 years (x = 5), and use these values in the same percentage formula we have been using.
The initial value of the car is 27,000, and after 5 years the value is 8,000.
This is a percentage drop of (27000 - 8000) / (27000) = 0.70, or a 70% drop.
The answer is 70%.
Hope this helps!
