Assume your car will lose 30% of its market value the first year and further los

Question

Assume your car will lose 30% of its market value the first year and further lose $4,000 each year thereafter (i.e. by the end of the first year, your used car can will be sold for $25,000 × (1-30%) = $17,500 on the used car market; and will be sold for $17,500-$4,000=$13,500 on the used car market by the end of year 2; and so on).How much will your used car be worth by the end of year 3 and year 4? Please fill the used car value in the market value schedule.

Year 1

Year 2

Year 3

Year 4

Ending Car Value

$17,500

$13,500

Year 1

Year 2

Year 3

Year 4

Ending Car Value

$17,500

$13,500

Explanation / Answer

Ending car value in Year 3 is = $13500- $4000 = $9500

Ending car value in Year 4 is = $9500- $4000 = $5500

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