A family buys a car for $20000. The value of the car decrease about 20% each year. After 6 years,the family decides to sell the car . Should the sell it for $40000?
Good heavens, yes! If they can get double what they paid for the car, go for it!
The number of students enrolled at a college is 15,000 and grows 4% each year.
What will be the enrollment after 25 years?
To determine whether the family should sell the car for $40000 after 6 years, we need to calculate the value of the car after each year of depreciation.
The car's value decreases by 20% each year, which means its value at the end of each year is 80% of its previous value.
Let's calculate the value of the car after each year:
Year 1: $20000 - (20% of $20000) = $20000 - ($20000 * 0.20) = $20000 - $4000 = $16000
Year 2: $16000 - (20% of $16000) = $16000 - ($16000 * 0.20) = $16000 - $3200 = $12800
Year 3: $12800 - (20% of $12800) = $12800 - ($12800 * 0.20) = $12800 - $2560 = $10240
Year 4: $10240 - (20% of $10240) = $10240 - ($10240 * 0.20) = $10240 - $2048 = $8192
Year 5: $8192 - (20% of $8192) = $8192 - ($8192 * 0.20) = $8192 - $1638.4 = $6553.6
Year 6: $6553.6 - (20% of $6553.6) = $6553.6 - ($6553.6 * 0.20) = $6553.6 - $1310.72 = $5242.88
After 6 years of depreciation, the value of the car is approximately $5242.88.
Therefore, the family should not sell the car for $40000, as its current value is significantly lower.