If a new truck costs $43,750 and it depreciates 18% per year, what will the truck be worth in 5 years?
if it depreciates by 18%, then as each year passes, its worth is reduced to 82% of its value
So, after 5 years, it is worth 43750 * 0.82^5
V = Vo(1-r)^t,
V = 43,750(1-0.18)^5 =
To find out the worth of the truck in 5 years, we need to calculate the depreciation for each year and subtract it from the original cost.
Step 1: Calculate the depreciation for one year:
Depreciation = Original cost * Depreciation rate
Depreciation = $43,750 * 18% = $7,875
Step 2: Calculate the worth after one year:
Worth after 1 year = Original cost - Depreciation
Worth after 1 year = $43,750 - $7,875 = $35,875
Step 3: Repeat Steps 1 and 2 for each subsequent year, up to 5 years:
Year 2:
Depreciation = $35,875 * 18% = $6,457.50
Worth after 2 years = $35,875 - $6,457.50 = $29,417.50
Year 3:
Depreciation = $29,417.50 * 18% = $5,295.15
Worth after 3 years = $29,417.50 - $5,295.15 = $24,122.35
Year 4:
Depreciation = $24,122.35 * 18% = $4,341.22
Worth after 4 years = $24,122.35 - $4,341.22 = $19,781.13
Year 5:
Depreciation = $19,781.13 * 18% = $3,560.20
Worth after 5 years = $19,781.13 - $3,560.20 = $16,220.93
Therefore, the truck will be worth $16,220.93 in 5 years.
To find out what the truck will be worth in 5 years, we need to calculate the depreciation for each year and subtract it from the original cost.
Step 1: Calculate the depreciation amount for one year.
Given that the depreciation rate is 18%, we can convert it into decimal form by dividing it by 100: 18 / 100 = 0.18.
Now, we can calculate the depreciation amount for one year by multiplying the original cost of the truck by the depreciation rate: $43,750 * 0.18 = $7,875.
Step 2: Calculate the truck's value after 5 years.
To find out the truck's value after 5 years, we need to subtract the depreciation amount from the original cost for each year.
First year: $43,750 - $7,875 = $35,875.
Second year: $35,875 - $7,875 = $28,000.
Third year: $28,000 - $7,875 = $20,125.
Fourth year: $20,125 - $7,875 = $12,250.
Fifth year: $12,250 - $7,875 = $4,375.
Therefore, the truck will be worth $4,375 in 5 years.