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25 September, 13:09

Lenny's car is worth $18,000 after 5 years. When the car was new, it sold for $24,000. What is the depreciation rate?

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  1. 25 September, 15:57
    0
    If you doing straight-line depreciation rate

    (P-s) : N

    (24000-18000) / 5=1200

    where p is cost, s is sold or salvage value, N is number of years
  2. 25 September, 16:43
    0
    A=p (1-r) ^t

    18000=24000 (1-r) ^5

    Solve for r (rate of depreciation)

    R = ((18,000:24,000) ^ (1:5) - 1) * 100

    R=-5.59 % per year
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