SOLUTION: An automobile purchased for $39,000 is worth $25000 after 5 years. Assuming the car's value depreciate steadily from year to year, what was it worth at the end of the third year?

Question 1107978: An automobile purchased for $39,000 is worth $25000 after 5 years. Assuming the car's value depreciate steadily from year to year, what was it worth at the end of the third year?
Found 2 solutions by CubeyThePenguin, greenestamps:
Answer by CubeyThePenguin(3113) (Show Source): You can put this solution on YOUR website!
x = depreciation rate

39000(1 - x)^5 = 25000
x = 0.085, or 8.5%

At the end of the third year, x = 3

39000(1 - 0.085)^3 = $29876.37
Answer by greenestamps(13200) (Show Source): You can put this solution on YOUR website!

The statement of the problem is deficient. Saying that the car's value depreciates "steadily" is not enough to specify whether you want exponential decrease or linear, or perhaps something else.

The other tutor assumed exponential decrease. If the decrease is linear, then the value decreased by $14,000 after 5 years, a decrease of $2800 per year. So its value after 3 years was

ANSWER (for linear depreciation): $30,600

RELATED QUESTIONS
An automobile purchased for $37000 is worth $2200 after 6 years. Assuming that... (answered by josgarithmetic)
An automobile purchased for $34,000 is worth $2500 after 5 years. Assuming... (answered by ewatrrr,MathTherapy)
please help me solve this question: An automobile purchased at 37000 is worth 2600 after (answered by Alan3354)
Can you please help me solve this problem. An automobile purchased for $17,000.00 is... (answered by checkley77)
An automobile purchased for $17,000 is worth $2300 after 7 years. Assuming that the car's (answered by josmiceli)
Manny purchased a new car this year for $20,500. The car is expected to depreciate at an... (answered by TimothyLamb)
A car was purchased for $3,495 and will depreciate 20% each year. How much will the car... (answered by stanbon)
A rule of thumb states that cars in personal use depreciate by 9% each year. Suppose a... (answered by ikleyn,josgarithmetic)
Sam has purchased a $30,000 car for his business. The car depreciates 30% every year.... (answered by ikleyn)