Colin buys a car for £22000. It depreciates at a rate of 1% per year. How much will it be worth in 5 years. Give your answer to the nearest penny where appropriate.
Mathematics · High School · Tue Nov 03 2020
Answered on
Given:
Original price (P): £22000.
Depreciation rate (R): 1%
Time (t): 5 years
Determine how much will the car worth after 5 years.
Solution:
Since we are given a percentage rate, we need to convert it first into decimal. In converting a percentage into decimal, divide the percentage by 100, hence in converting a decimal to percentage, multiply the percentage by 100.
= 1/100
= 0.01
Formula to be used:
A = P ( 1 - rt)
A = £22000.( 1 - (0.01)(5))
A = £22000 (1 - 0.05)
A = £22000 (0.95)
A = £20,900
Final answer:
The car's value after 5 years is £20,900.