Answer: The value if the sports car after four years is $15,824.26
Step-by-step explanation: The initial value of the sports car is $35,000 and the depreciation rate is 18% every year. What this means is that the sports car would depreciate by 18% this year and the following year it would lose another 18% of the value after year 1, and so on till the end of year 4. Therefore the depreciation would be calculated as follows;
Year 1 value = 35000
Depreciation = 35000 x 0.18
Depreciation = 6300
End of year 1 value = 35000 - 6300
End of year 1 value = 28700
Year 2 value = 28700
Depreciation = 28700 x 0.18
Depreciation = 5166
End of year 2 value = 28700 - 5166
End of year 2 value = 23534
Year 3 value = 23534
Depreciation = 23534 x 0.18
Depreciation = 4236.12
End of year 3 value = 23534 - 4236.12
End of year 3 value = 19297.88
Year 4 value = 19297.88
Depreciation = 19297.88 x 0.18
Depreciation = 3473.62
End of year 4 value = 19297.88 - 3473.62
End of year 4 value = 15824.26
Therefore, the sports car at the end of 4 years would be valued at $15,824.26
