SOLUTION: 4. Mr. Dadar bought a Honda Accord for $25 000. After 12 years, he sells the car for $5 000. What is the annual depreciation rate for the value of his car?

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Question 888087: 4. Mr. Dadar bought a Honda Accord for $25 000. After 12 years, he sells the car for
$5 000. What is the annual depreciation rate for the value of his car?

Answer by Alan3354(69443) About Me  (Show Source):
You can put this solution on YOUR website!
4. Mr. Dadar bought a Honda Accord for $25 000. After 12 years, he sells the car for
$5 000. What is the annual depreciation rate for the value of his car?
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FV = PV*(AD)^t AD = annual Depreciation
5000 = 25000*AD^5
AD^5 = 0.2
AD+=+root%285%2C0.2%29
AD =~0.72478 --> it's worth 0.72478*previous year's worth
Depreciation = 1 - AD = 0.27522 or ~27.5% per year