A car costs £34000 at the beginning of 2011. It is depreciating in value by 11.2% each year. How much will it be worth by the end of 2013?

Question

Test Question 

Answer 1

A = pr^t

 

'A' is the initial value, r is the growth or decay rate, t is time

 

the "growth rate" r here is -11.2% so the actual growth is 

88.8% or .888.  We are talking a 3 year period so t=3

 

A = 34000(.888)³ = 23807.72