Question

4. You purchase a new car for $53,000. It has a steady declining rate of 11.8% per year. Is this an

example of Appreciation or Depreciation? What will be the value of your car in 5 years?
(5 Points)
Enter your answer

Answer 1

Depreciation, 52,999.41

Answer 2

Answer: $21730

Explanation:

Depreciation = exact value×rate×time/100

Exact value =$53000

Rate= 11.8%

Time= 5yrs

Depreciation = $53000×11.8×5/100

Depreciation = 3127000/100

Depreciation = $31,270

This shows that the depreciation value of the car by 5yrs will be $31270.

To get the value of the car in years,

The exact value - depreciation value

=$53000-$31270

=$21730

The value of the car in 5years will be $21730