Hi i have the same question as someone else but no one answered. please help me my assignment is do tomorrow!
An car was purchased for $47000 and its depreciation value is 22% each year.
How long would it take the car to be worth nothing (zero dollars)?
Explain.
I'm sure there's a formula for this, but I don't know it.
Therefore, I'd do it the hard way.
47,000 * 0.22 = 10,340
47,000 - 10,340 = 36,570 (end of first year)
36,570 * 0.22 = 8,045.40
36,570 - 8,045.40 = 28,524 (second year)
I'm sure you have the idea now.
see my answer to Jamey
http://www.jiskha.com/display.cgi?id=1229560228
To determine how long it would take for the car to be worth nothing, we need to understand the concept of depreciation and its relationship with time.
Depreciation refers to the decrease in value of an asset over time. In this case, the car depreciates by 22% each year. This means that every year, the car's value decreases by 22% of its original value.
To calculate the value of the car after each year, we can multiply the previous year's value by (100% - depreciation rate). In this case, the depreciation rate is 22%, so the calculation would be:
Year 1: $47,000 * (100% - 22%) = $47,000 * 78% = $36,660
Year 2: $36,660 * (100% - 22%) = $36,660 * 78% = $28,574.80
Year 3: $28,574.80 * (100% - 22%) = $28,574.80 * 78% = $22,295.78
...
Year n: Value after n years
We can observe that the value of the car decreases each year, but it never reaches zero. Consequently, the car does not reach zero value.
In this scenario, it would take an infinite number of years for the car to be worth nothing. In practical terms, the car's value would eventually become so marginal that it would be considered negligible or effectively zero, but it would not technically reach a value of zero.