If you bought a car today for $40,000, and depreciation was 15%, how much would it...

Question

Question

If you bought a car today for $40,000, and depreciation was 15%, how much would it likely to be worth in two years?

business finance

Answer 1

Answer #1

Solution:

Calculation of worth of car after 2 years

Price of car today=$40,000

Worth of car after 1 year=Price(1-depreciation rate)

=$40,000(1-0.15)

=$34,000

Worth of car after 2 years=Worth of car after 1 year(1-depreciation rate)

=$34,000(1-0.15)

=$28,900

Thus,correct answer is option D i.e $28,900

Answer 2

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