I need help:
The value of a new car decreases dramatically as soon as it leaves the dealership. Assuming that you just bought a new car with $20,000 and that it depreciates at a rate of 2% a month. How much will the car be worth in one year?
rather than do it 12 times, just use
20000 * 0.98^12
There are 12 months in a year. Each month it decreases by 2%. This means 98% of the original price will be remaining at the end of the first month. So to get the price of the care after one month, it would be
20000*0.98=19600
Repeat the process I just did for the remaining 11 months. Remember to use the price you get at the end of each month for the next month's calculation.
To calculate how much the car will be worth in one year, we need to find the monthly depreciation amount and then use it to calculate the final value after one year.
First, let's find the monthly depreciation amount. The car depreciates at a rate of 2% per month, which means the value decreases by 2% each month.
To calculate the monthly depreciation amount:
Depreciation amount = 2% of the car's value
Since the value of the car is $20,000, we can calculate the monthly depreciation amount:
Depreciation amount = 2% * $20,000 = $400
Now that we have the monthly depreciation amount, we can calculate the value of the car after one year (12 months). Since the value of the car decreases each month, we subtract the depreciation amount from the initial value repeatedly for 12 months.
To calculate the value of the car after one year:
Final value = Initial value - (Depreciation amount * Number of months)
Final value = $20,000 - ($400 * 12)
Final value = $20,000 - $4,800
Final value = $15,200
Therefore, the car will be worth $15,200 after one year.