Question

Evan purchased a car for $25,000. Each year, its value depreciates by 10%. How
much will Evan’s car be worth in 8 years?

Answer 1

cost of car= $25000

cost of asset - depreciate value= total depreciate cost

$25000-10%=$ 22500

life of car =8 yrs

depreciation amount= $22500/8= $2812.5

therefore, the depreciation amount of Car will be $2812.5 for 8 years.

years book value dep. book value

(beg. of yrs.). ( end of yrs.)

1. $25000 $2812.5 $22187.5

2. $22187.5 $2812.5 $19375

3. $19375 $2812.5 $16562.5

4. $16562.5 $2812.5 $13750

5. $13750 $2812.5 $10937.5

6. $10937.5 $2812.5. $8125

7. $8125 $2812.5. $5312.5 8. $5312.5 $2812.5. $2500

according to straight line method value of car after 5 years will be $2500