A car was valued at $25,000 in the year 1992. The value depreciated to $15,000 by the year 2004.
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To calculate the depreciation rate of the car between 1992 and 2004, you can use the following formula:
Depreciation Rate = (Initial Value - Final Value) / Initial Value
In this case, the initial value of the car in 1992 is $25,000, and the final value in 2004 is $15,000.
Depreciation Rate = ($25,000 - $15,000) / $25,000
Depreciation Rate = $10,000 / $25,000
Depreciation Rate = 0.4
So, the depreciation rate of the car between 1992 and 2004 is 0.4, or 40%.
This means that the car lost 40% of its value over the course of those 12 years.
To calculate the annual rate of depreciation for the car, we can use the formula:
Rate of depreciation = (Ending value - Beginning value) / (Number of years)
In this case:
Beginning value = $25,000
Ending value = $15,000
Number of years = 2004 - 1992 = 12 years
Using the formula:
Rate of depreciation = ($15,000 - $25,000) / 12
= -$10,000 / 12
= -$833.33
So, the car depreciated at an average rate of approximately -$833.33 per year.