Question

Calling buys a car for £42,800 depreciates at a rate of 5% per year how many years will it take for it to be worth less than 40,000

Answer 1

Answer:

2 years

Step-by-step explanation:

by using the formula of compound interest,

40000=42800(1-5/100)^n

implies that, 100=107(95/100)^n

implies that, 100/107=(95/100)^n

implies that, 0.93=0.95^n

implies that, n≈1

for n=1, 42800(95/100)=428x95=40600...

thus, after 1 year, its price is not less than 40000, therefore, after 2 years its price will be less than 40000