Question 450948: Word Problems: Growth and Decay
Question: Ley needs to replace her car. If she leases a car, she will pay $410 a month for 2 years and then has the option to buy the car for $14,458. The current price of the car is $17,369. If the car depreciates at 16% per year, how will the depreciated price compare with the buyout price of the lease?
Answer by jorel1380(3719)   (Show Source):
You can put this solution on YOUR website! If the car depreciates at 16% per year, that means at the end of the year it is worth only 84% of the value it had to begin with. At the end of 2 years, it is only worth .84x.84=70.56% of its' beginning value, which means it has lost a total of 29.44% of its' original value.
17369x.2944=$5113.36
410x24=9840
17369-5113.36=$12255.64
The car's depreciated value is obviously less than its' buyout cost..
|
|
|
