If you pay $950000 for a car and its value depreciates 10% per year how much will be its worth 5 years from now?
after 1 year ---- 950000(.9) =
after 2 years ----950000(.9)^2
..
after 5 years ---- 950000(.9)^5 = ....
950,000*.10 = 95,000
950,000-95,000 = 855,000 (1yr)
855,000*.10 = 85,500
855,000-85,500 = 769,500 (2yr)
Repeat the process until reach 5 yrs.
To calculate the worth of the car 5 years from now, we need to determine the value after each year of depreciation:
Year 1: $950,000 - 10% ($950,000 x 0.10) = $855,000
Year 2: $855,000 - 10% ($855,000 x 0.10) = $769,500
Year 3: $769,500 - 10% ($769,500 x 0.10) = $692,550
Year 4: $692,550 - 10% ($692,550 x 0.10) = $623,295
Year 5: $623,295 - 10% ($623,295 x 0.10) = $560,965.50
Therefore, the car will be worth $560,965.50 after 5 years of depreciation.
To calculate the worth of the car 5 years from now considering a 10% annual depreciation, you can use the following formula:
Worth = Initial Value * (1 - Depreciation rate)^Number of years
In this case, the initial value of the car is $950,000, and the depreciation rate is 10% or 0.10. Thus, plugging in these values into the formula:
Worth = $950,000 * (1 - 0.10)^5
Now, let's calculate it step by step:
1. Calculate the depreciation factor: (1 - 0.10) = 0.90
2. Raise the depreciation factor to the power of the number of years: 0.90^5 = 0.59049
3. Multiply the initial value by the result: $950,000 * 0.59049 = $560,966.50
Therefore, the car's worth 5 years from now, with a 10% annual depreciation rate, would be approximately $560,966.50.