Question

What is the present value of Jay's truck at the end of one year if he originally paid $17,895 and it depreciated by 20%?

Answer 1

$14,316

Explanation:

ORIGINAL VALUE = $17,895
If it depreciated after a year, that means it lost value.
It depreciated 20% .. which means it lost 20% of it's ORIGINAL VALUE.

TO FIND PRESENT VALUE:
(original value) - (20% of original value) = (present value)

TO FIND 20% OF ORIGINAL VALUE:
20% = 0.20
Multiply 0.20 by $17,895:
`0.20*$17,895=$3,579`

$3,579 is 20% of the original value.

USE EQUATION ABOVE TO FIND PRESENT VALUE:
(original value) - (20% of original value) = (present value)
($17,895) - ($3,579) = (present value)
(present value) = $14,316

The present value of Jay's truck is $14,316.

Answer 2

`$14,316`

Explanation:

If the value of the truck depreciated by `20%` it means it lost `20%` of its value.

Therefore it is only worth `80%` of the original value

`100%-20% = 80%`

So, find `80%`of the original price.

`80% " of "$17.895`

`=80/100 xx 17895/1`

`= $14,316`