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
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