car a is purchased for $30,000 and depreciates at 12% per year. car b is purchased for $26,000 and…

car a is purchased for $30,000 and depreciates at 12% per year. car b is purchased for $26,000 and depreciates at 9% per year. after 7 years, which car is worth more and by approximately how much?\ncar b by $1,175\ncar a by $1,175\ncar a by $750\ncar b by $750\nclear my selection

car a is purchased for $30,000 and depreciates at 12% per year. car b is purchased for $26,000 and depreciates at 9% per year. after 7 years, which car is worth more and by approximately how much?\ncar b by $1,175\ncar a by $1,175\ncar a by $750\ncar b by $750\nclear my selection

Answer

Explanation:

Step1: Calculate the value of Car A after 7 years

The formula for depreciation is (V = P(1 - r)^t), where (P) is the initial price, (r) is the rate of depreciation, and (t) is the time in years. For Car A: (P = 30000), (r=0.12), (t = 7) (V_A=30000\times(1 - 0.12)^7=30000\times0.88^7) (0.88^7\approx0.4966) (V_A\approx30000\times0.4966 = 14898)

Step2: Calculate the value of Car B after 7 years

For Car B: (P = 26000), (r = 0.09), (t=7) (V_B=26000\times(1 - 0.09)^7=26000\times0.91^7) (0.91^7\approx0.5470) (V_B\approx26000\times0.5470=14222)

Step3: Find the difference in values

(V_A-V_B=14898 - 14222=676\approx750)

Answer:

Car A by $750