Question 1025988
Vanessa bought a car for $20,000 .  It is expected to depreciate at a continuous rate.  What will be the value of the car in 2 years? Use K - .105.  The answer should be $16,212.00
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If K - .105 means it depreciates by 0.105 of its value per year:
After each year it's work 0.895 of the previous year (1 - 0.105)
--> 20,000*0.895 1st year
20,000*0.895*0.895 2nd year
=~ $16,020.50
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Oops, continuous depreciation.
Not usually used for cars.
Cars depreciate when a new model is released, often in September.
A 2014 Lexus becomes worth less in Sep 2015, then again in Sep 2016, etc.
My knowledge of cars' value caused me to miss the "continuous" depreciation mentioned.