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1 June, 14:22

Car 1 cost $22,600 when new and depreciated 14% each year for 5 years. The same year, Car 2 cost $17,500 when new and depreciated 7% each year for 5 years. What was the difference in the values of the two cars after 5 years to the nearest dollar? a. $1543 b. $12175 c. $10,631 d. $5100

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  1. 1 June, 17:49
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    Hi there

    To find the value of the car after 5 years use the formula of

    A=p (1-r) ^t

    A future value

    P present value

    R rate of depreciation

    T time

    Let's first find the value of car 1 after 5 years

    A=22,600 * (1-0.14) ^ (5)

    A=10,631.65

    Second find The value of car 2

    A=17,500 * (1-0.07) ^ (5)

    A=12,174.55

    So the difference

    12,174.55-10,631.65=1,542.9

    Round your answer to get 1543

    Good luck!
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