Depreciation

Question

A $20,000 car depreciates linearly to 0 in 25 years. How much is the car worth after 4 years?

Answer 1

Cassie,

 

Lets let the coordinates represent (time , value) as the value of the car is a function of time.

 

First coordinate with the initial time = 0  (0,20,000)   2nd coordinate (25, 0)

 

m = the difference in the y values / difference of the x    =>    (20000 -0) / (0 - 25)  =  -800   slope..... or how much per year does the car lose in value?   800 dollars / year

 

so if Value = mx  + b   = -800x + 20000       V(4) = -800(4) + 20000 =  -3200 + 20000  = 16800 dollars

 

Hope that helps.  

 

Bob