You have decided to buy a new car, but you are concerned about the value of the car depreciating over time. You do some research on the model you are looking at and obtain the following information:Suggested retail price - $18,790Depreciation per year - $1385 (It is assumed that this value is constant.)The following table represents the value of the car after n years of ownership.
Accepted Solution
A:
The answer should be set up like so:
3125 = 3200*(d)^3 3125/3200 = d^3 3-root (3125/3200) = d d = 0.992125657...
1 - d = 0.007874... Therefore it depreciates at about 0.8% monthly
To find the depreciation 6 months from now, or 9 months from the beginning: v = 3200 (d)^9 = 2980.232239...