Malcolm buys a caravan for £12000. It depreciates by 31% per year. How much is it worth after 7 years?

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Answer 1 · 2018-04-10T08:37:55

Step by step solution. After 7 years it worths 893.5 GBP

W stands for the worth:
1st year: #W_1= 0.69times12000 = 8280#

2nd year: #W_2= 0.69times8280 = 5713.2#

3rd year: #W_3= 0.69times5713.2 = 3942.1#

4th year: #W_4= 0.69times3942.1 = 2720.0#

5th year: #W_5= 0.69times2720.0 = 1876.8#

6th year: #W_6= 0.69times1876.8 = 1295#

7th year: #W_7= 0.69times1295 = 893.5#

Note that it keeps its 69% of the value each year..