1. A new sports car sells for $35,000. The value of the sports car decrease by 18% annually. Find the

value of the car after 4 years.

Answer: The value if the sports car after four years is $15,824.26

Step-by-step explanation: The initial value of the sports car is $35,000 and the depreciation rate is 18% every year. What this means is that the sports car would depreciate by 18% this year and the following year it would lose another 18% of the value after year 1, and so on till the end of year 4. Therefore the depreciation would be calculated as follows;

Year 1 value = 35000

Depreciation = 35000 x 0.18

Depreciation = 6300

End of year 1 value = 35000 - 6300

End of year 1 value = 28700

Year 2 value = 28700

Depreciation = 28700 x 0.18

Depreciation = 5166

End of year 2 value = 28700 - 5166

End of year 2 value = 23534

Year 3 value = 23534

Depreciation = 23534 x 0.18

Depreciation = 4236.12

End of year 3 value = 23534 - 4236.12

End of year 3 value = 19297.88

Year 4 value = 19297.88

Depreciation = 19297.88 x 0.18

Depreciation = 3473.62

End of year 4 value = 19297.88 - 3473.62

End of year 4 value = 15824.26

Therefore, the sports car at the end of 4 years would be valued at $15,824.26