This is the question:
A company bought a new truck. Each year the value of the truck depriciates by 20%. The value of the new truck can be multiplied by a single number to find its value at the end of 4 years.
Find this single number as a decimal.
Thanks everyone - please help! how do you work this out, could you please show your working? i hate this question, thanks everyone x
A company bought a new truck. Each year the value of the truck depriciates by 20%. The value of the new truck can be multiplied by a single number to find its value at the end of 4 years.
Find this single number as a decimal.
Thanks everyone - please help! how do you work this out, could you please show your working? i hate this question, thanks everyone x
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Let the initial value of the truck b a variable, call it X.
After the first year, the truck's value has depreciated by 20%. This means it's only worth 80% of it's initial value. To find it's value after the first year, we can multiply its initial value by 0.8.
Value after 1st year = X*(.8)
After the second year, the truck's value further depreciates another 20%. This means it's value is only worth 80% of what it was after the 1st year. To find it's value after the second year, we can multiply the 1st year value by 0.8.
Value after 2nd year = X*(.8)*(.8) = X*(.64)
We do the same for the third and fourth years and find:
Value after 3rd year = X*(.8)*(.8)*(.8) = X*(.512)
Value after 4th year = X*(.8)*(.8)*(.8)*(.8) = X*(.4096)
To find its value at the end of 4 years, you can multiply by 0.4096.
After the first year, the truck's value has depreciated by 20%. This means it's only worth 80% of it's initial value. To find it's value after the first year, we can multiply its initial value by 0.8.
Value after 1st year = X*(.8)
After the second year, the truck's value further depreciates another 20%. This means it's value is only worth 80% of what it was after the 1st year. To find it's value after the second year, we can multiply the 1st year value by 0.8.
Value after 2nd year = X*(.8)*(.8) = X*(.64)
We do the same for the third and fourth years and find:
Value after 3rd year = X*(.8)*(.8)*(.8) = X*(.512)
Value after 4th year = X*(.8)*(.8)*(.8)*(.8) = X*(.4096)
To find its value at the end of 4 years, you can multiply by 0.4096.
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Whoever set the question should have specified whether depreciation was on a 'straight line' basis (ie 20% of the original price) or a 'reducing balance' basis (ie 20% of the residual value). The answers will be different.
If we assume they meant the straight line method of depreciation, the answer is 0.2.
It starts off with 100% of its value.
It loses 20% of its original value each year.
After 4 years it has lost 4 x 20% which is 80%
100% - 80% = 20% which is its residual value.
Converting that (20% or 20/100) to a decimal fraction gives us 0.2
If we assume they meant the straight line method of depreciation, the answer is 0.2.
It starts off with 100% of its value.
It loses 20% of its original value each year.
After 4 years it has lost 4 x 20% which is 80%
100% - 80% = 20% which is its residual value.
Converting that (20% or 20/100) to a decimal fraction gives us 0.2
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you aint stressed, you're lazy thats all.