The value of a car depreciates by 18% per year. Work out the current value of a car bought 4 years ago for £20000

Given:

depreciation rate: 18%

Value of the car : 20,000

Age of the car : 4 years.

The depreciation is based on the current value of the car. Therefore, the amount of depreciation varies.

yr Beginning Value Dep. Rate Depreciation Ending Value

1 20,000.00 18% 3,600.00 16,400.00

2 16,400.00 18% 2,952.00 13,448.00

3 13,448.00 18% 2,420.64 11,027.36

4 11,027.36 18% 1,984.92 9,042.44

The current value of a car bought 4 years ago is 9,042.44

Beginning value : purchased amount on 1st year. then, ending balance of the previous year from 2nd year onwards.

Depreciation : Beginning value * depreciation rate

Ending value : Beginning value - depreciation