If I bought a truck for $43,750 and it depreciates at a rate of 13% each year. What would the price of the truck be worth in five years?
To determine the price of the truck after five years of depreciation, we need to use the formula:
Price after depreciation = Original price * (1 - Depreciation rate)^Number of years
Substituting the given values, we get:
Price after depreciation = $43,750 * (1 - 0.13)^5
Price after depreciation = $24,136.56
Therefore, the price of the truck after five years of depreciation would be approximately $24,136.56.
To calculate the price of the truck after five years with a depreciation rate of 13% each year, we need to apply the depreciation formula. The formula is:
Future Value = Present Value * (1 - Depreciation Rate)^Number of Years
In this case, the Present Value (P) is $43,750, the Depreciation Rate (R) is 13% (or 0.13), and the Number of Years (N) is 5.
Substituting these values into the formula:
Future Value = $43,750 * (1 - 0.13)^5
Now, we can solve this equation to find the future value.
Future Value = $43,750 * (0.87)^5
Using a calculator:
Future Value = $43,750 * 0.443705953
Future Value ≈ $19,368.52
Therefore, after five years, the truck would be worth approximately $19,368.52.
To calculate the price of the truck after five years, we can use the formula for exponential decay:
Price after t years = Initial price * (1 - Decay rate)^(Number of years)
In this case, the initial price of the truck is $43,750, and the decay rate is 13% or 0.13. Plugging these values into the formula, we can calculate the price after five years:
Price after 5 years = $43,750 * (1 - 0.13)^5
Calculating this:
Price after 5 years = $43,750 * (0.87)^5
Price after 5 years = $43,750 * 0.44563
Price after 5 years ≈ $19,476.34
Therefore, the price of the truck would be approximately $19,476.34 after five years.