SOLUTION: A business buys a car for $32 000. For the company records, the value of the car is depreciated each year. The value of the vehicle could be reduced by the same amount each year o

Question 1025137: A business buys a car for $32 000. For the company records, the value of the car is depreciated each year. The value of the vehicle could be reduced by the same amount each year over a given number of years until the value is zero. This is called straight line depreciation. Another method is to reduce the value of the car by a percentage each year, 20% for example.
Compare the depreciated value of the car after five years using both methods of depreciation. Use 20% for the percentage depreciation. For straight line depreciation reduce the value of the car by the same amount over 5 years, until the value is zero.
Answer by josmiceli(19441) (Show Source): You can put this solution on YOUR website!
20% depreciation each year:

The car is worth $10,485.76 after 5 yrs
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If the car depreciates by $6.400 each year,
after 5 yrs the car is woth $0
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