Question

29. A car bought for P 1,000,000,000.00 depreciates by 10% a year. After how many years can one
buy the car at about half its original price?
a. 5.5 yrs
b. 6 yrs
c. 6.5 yrs
​

Answer 1

Answer:

c.6.5 yrs

Step-by-step explanation:

V¹(1-f)^n =V²

(V¹=Initial cost (1bn) ; f = depreciation (0.1); n= no of years ; V²=Final cost)

1bn*(1-0.1)^n = 1bn/2

Taking ln on both sides :

n= ln(0.5)/ln(1-0.1)

n=6.57 years