Answer:
The value of the car after two years is $14,100.025
Step-by-step explanation:
Here, we want to calculate the value of a car after its second year, given the depreciation percentage.
To get the value of the car year after year at the fixed percentage level, what we do is to set up an exponential equation;
V = I(1-r)^t
where V is the present value
I is the initial value = $25,000
r is the rate = 24.9% = 24.9/100 = 0.249
t is the number of years = 2 in this case
So we substitute these values in the depreciation case and have;
V = 25000(1-0.249)^2
V = 25000(0.751)^2
V = $14,100.025
