Q4.
[3]
Maximum mark: 6]
Hannah buys a car for $24 900. The value of the car depreciates by 16% each year.
(a) Find the value of the car after 10 years.
Patrick buys a car for $12000. The car depreciates by a fixed amount each year, and after
6 years it is worth $6200.
(b) Find the annual rate of depreciation of the car.
[3]
Answers
Given : Hannah buys a car for $24 900. The value of the car depreciates by 16% each year.
To Find : (a) Find the value of the car after 10 years.
Solution:
Hannah buys a car for $24 900.
Rate of depreciation = 16% each year.
t = 10
Cost after 10 years = 24900 ( 1 - 16/100)¹⁰
= 24900 ( 0.84)¹⁰
= 4,355.04
Patrick buys a car for $12000
The car depreciates by a fixed amount each year, and after
6 years it is worth $6200.
Let say fixed amount of depreciation = x
Depreciation in 6 years = 6x
12000 - 6x = 6200
=> 6x = 5800
=> x = 966.67
annual fixed depreciation of the car. = 966.67
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