Question

Question=1
- Revista
A man buys a car worth $24,000. The value depreciates completely in 6 years at a unfor rate. He
sells the car at $22.000 after one year. What is his return on investment?

Answer 1

Answer:

-8.33% is the Return on Investment after one year.

Explanation:

We are given in the question that, the man purchased the car for $ 24000 and the value depreciates completely in 6 years.

∴ The value depreciates at a rate of $\frac{24000}{6000} = 4000$ per year.

Thus, the value after one year of the car would be $ 24000 - $ 4000 = $20000

Furthermore, we are given that the man sells the car after one year at a price of $ 22000.

Thus, the return on investment of the man would be given by:

$\frac{20000 - 22000)}{24000} * 100$

= $\frac{-2000}{24000} * 100$

= - 0.0833 * 100

= -8.33%

Hence, the return on investment of the man after one year would be -8.33%.

Answer 2

Answer:

10%

Explanation:

24000

Depreciates in 6 yrs ---> 24000/6 ---> 4000/yr

Sells in one year at 22000

but At depreciate rate he must be selling at 24000-4000=20000

Return ---> (22000-20000)/20000 == 0.10 ---> 10%