If a car's value depreciates by 25% each year, what will be its value after one

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Question: If a car\'s value depreciates by 25% each year, what will be its value after one year if its current value is $20,000?

Options:

Correct Answer: $15,000

Solution:

Value after one year = 20000 - (25/100)*20000 = 20000 - 5000 = $15,000.

If a car's value depreciates by 25% each year, what will be its value after one year if its current value is $20,000?

If a car's value depreciates by 25% each year, what will be its value after one year if its current value is $20,000?

Step 1: Identify the current value of the car, which is $20,000.
Step 2: Determine the percentage of depreciation, which is 25%.
Step 3: Calculate the amount of depreciation by multiplying the current value by the depreciation percentage: 25/100 * 20000.
Step 4: Perform the multiplication: 25/100 * 20000 = 5000.
Step 5: Subtract the depreciation amount from the current value: 20000 - 5000.
Step 6: Perform the subtraction: 20000 - 5000 = 15000.
Step 7: The value of the car after one year is $15,000.

Depreciation Calculation – Understanding how to calculate the depreciation of an asset over time, specifically using a percentage decrease.