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Question 10
Aaliyah bought a car. In the first year after she bought the car, its value depreciated at a rate of 23% per annum. In the second year after she bought the car, its... show full transcript
Step 1
Answer
To find the value of the car when Aaliyah bought it, we need to reverse the depreciation that occurred over the two years.
Since the car depreciated by 19% in the second year, its value at the end of the first year (denote this value as V1) can be found using:
Substituting the end value V2 = £10914.75:
Now, solve for V1:
Now, we know the value of the car at the end of the first year was approximately £13421.60. Since it depreciated by 23% in the first year, we can find the original value (denote this value as V0) as follows:
Substituting the value of V1:
Now, solve for V0:
Thus, the value of the car when Aaliyah bought it was approximately £17445.26.
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