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Homework answers / question archive / A new car is purchased for 20700 dollars
A new car is purchased for 20700 dollars. The value of the car depreciates at 11% per year. What will the value of the car be, to the nearest cent, after 11 years?
The cost of the new car = $ 20700
The rate of depreciation of the car = 11% per year
The value of the car, to the nearest cents, after 11 years
We know that when there is a decrease in the price of car, machines or certain valuable articles, then to find its value after n years, the following formula can be used:
where
D = value after n years
P = present value
R = rate of decrease
n = no. of years
Now, we will substitute the given values in the formula,
D = 20700
⇒ D = 20700
⇒ D = 20700
⇒ D = 20700 × 0.277517 ...... [0.89¹¹ = 0.277517 calculation done on calculator]
⇒ D = $ 5744.60
Thus, the value of the car after 11 years will be $ 5744.60.