Response:
(a) The linear depreciation function relating to the car's value y after a few years t is given by:
y = 25,425 - 2,739 × t
(b) The projected worth of the car in 7 years amounts to $6,252.
(c) The depreciation is at a rate of $2,739 yearly.
Step-by-step explanation:
The manufacturer's suggested retail price (MSRP) for the vehicle is $25,425.
Its expected valuation in 5 years is $11,730.
(a) The linear depreciation formula is as follows:
Where;
Asset Cost = $25,425
Salvage Value = $11,730
Asset Lifespan = 5 years
From this, we obtain;
Thus, the linear depreciation function can be expressed as:
y - 25,425 = -2,739×(t - 0)
y = -2,739·t + 0 + 25,425 = 25,425 -2,739·t
y = 25,425 - 2,739 × t
Where;
y = The estimated worth of the car after a specified duration
t = The years calculated for depreciation
(b) The value of the vehicle in 7 years can be calculated as below;
For t = 7, we find;
y = 25,425 -2,739·t = y = 25,425 -2,739 × 7 = $6,252
The expected car value after 7 years is $6,252.
(c)
The car depreciates at a yearly rate of $2,739.