a certain car was purchased for $26,600. the car has a resale value of $17,900 after a useful life of 6…

a certain car was purchased for $26,600. the car has a resale value of $17,900 after a useful life of 6 years. what is the book value of this car after 2 years? annual depreciation expense = $1,450 book value = $? round to the nearest hundredth

a certain car was purchased for $26,600. the car has a resale value of $17,900 after a useful life of 6 years. what is the book value of this car after 2 years? annual depreciation expense = $1,450 book value = $? round to the nearest hundredth

Answer

Explanation:

Step1: Recall book - value formula

The formula for book - value is $BV = P-DE\times n$, where $P$ is the purchase price, $DE$ is the annual depreciation expense, and $n$ is the number of years. Here, $P = 26600$, $DE=1450$, and $n = 2$.

Step2: Substitute values into formula

$BV=26600 - 1450\times2$. First, calculate the product $1450\times2 = 2900$. Then, calculate $26600-2900$. $BV=23700$.

Answer:

$23700.00$