mr jones buys a new car for $50,000. the car decreases in value at the rate of 30% each year. find the value of the car after two years.
after first year .7(50000) is left
after second year .7(of above result) is left
amount left = 50000(.7)(.7) = 24500
HOW!!!??!!?!
To find the value of the car after two years, we need to calculate the depreciation for each year and subtract that from the original price of $50,000.
To calculate the depreciation, we need to find the value that is 30% less than the previous year's value.
For the first year, the car's value decreases by 30%, which can be calculated using the formula:
Depreciation for year 1 = 30% of $50,000
Depreciation for year 1 = 0.3 * $50,000
Depreciation for year 1 = $15,000
Now, to find the value of the car after the first year, we subtract the depreciation from the original price:
Value after year 1 = $50,000 - Depreciation for year 1
Value after year 1 = $50,000 - $15,000
Value after year 1 = $35,000
For the second year, we need to calculate the depreciation from the value after year 1:
Depreciation for year 2 = 30% of $35,000
Depreciation for year 2 = 0.3 * $35,000
Depreciation for year 2 = $10,500
Now, we subtract the depreciation from the value after year 1 to find the value after year 2:
Value after year 2 = Value after year 1 - Depreciation for year 2
Value after year 2 = $35,000 - $10,500
Value after year 2 = $24,500
Therefore, the value of the car after two years is $24,500.