Determine the approximate value of the vehicle years after purchase. A vehicle purchased for $25000 depreciates at a constant rate of 7% Round to the nearest whole number.
Answer
To determine the approximate value of the vehicle years after purchase, we can use the following formula:
Value after depreciation = Original value * (1 – depreciation rate)^number of years
In this case, the original value is $25000 and the depreciation rate is 7% or 0.07. Let’s assume that we want to find the value of the vehicle after 3 years. Then the formula becomes:
Value after depreciation = $25000 * (1 – 0.07)^3 Value after depreciation = $25000 * 0.657 Value after depreciation = $16425
Rounding this to the nearest whole number, the approximate value of the vehicle after 3 years is $16,425.
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