What is the value, after 7 years, of a 2014 Ford Mustang that originally cost $25,000.00 if it depreciates at a rate of 8% per year
Mathematics · Middle School · Wed Jan 13 2021
Answered on
Given:
Original cost: $25,000
Depreciation rate: 8%
Term: 7 years
Formula for Depreciation:
A = C ( 1 - ( r ) (t) )
A = Future Value
C = Original Cost
r = rate
t = term
Solution:
Substitute the given values to the formula for depreciation.
A = $25,000( 1 - ( 0.08)(7))
A = $25,000( 1 - .56 )
A = $25,000(0.44 )
A = $11,000
Final answer:
The future value of the car after 7 years is $11,000