Question

Two different cars each depreciate to 60% of their respective original values. The first car depreciates at an annual rate of 10%. The second car depreciates at an annual rate of 15%. What is the approximate difference in the ages of the two cars? 1. 7 years 2. 0 years 3. 1 years 5. 0 years.

Answer 1

The approximate difference in the ages of the two cars, which  depreciate to 60% of their respective original values, is 1.7 years.

What is depreciation?

Depreciation is to decrease in the value of a product in a period of time. This can be given as,

$FV=P\left(1-\dfrac{r}{100}\right)^n$

Here, (P) is the price of the product, (r) is the rate of annual depreciation and (n) is the number of years.

Two different cars each depreciate to 60% of their respective original values. The first car depreciates at an annual rate of 10%.

Suppose the original price of the first car is x dollars. Thus, the depreciation price of the car is 0.6x. Let the number of year is $n_1$. Thus, by the above formula for the first car,

$0.6x=x\left(1-\dfrac{10}{100}\right)^{n_1}\\0.6=(1-0.1)^{n_1}\\0.6=(0.9)^{n_1}$

Take log both the sides as,

$\log 0.6=\log (0.9)^{n_1}\\\log 0.6={n_1}\log (0.9)\\n_1=\dfrac{\log 0.6}{\log 0.9}\\n_1\approx4.85$

Now, the second car depreciates at an annual rate of 15%. Suppose the original price of the second car is y dollars.

Thus, the depreciation price of the car is 0.6y. Let the number of year is $n_2$. Thus, by the above formula for the second car,

$0.6y=y\left(1-\dfrac{15}{100}\right)^{n_2}\\0.6=(1-0.15)^{n_2}\\0.6=(0.85)^{n_2}$

Take log both the sides as,

$\log 0.6=\log (0.85)^{n_2}\\\log 0.6={n_2}\log (0.85)\\n_2=\dfrac{\log 0.6}{\log 0.85}\\n_2\approx3.14$

The difference in the ages of the two cars is,

$d=4.85-3.14\\d=1.71\rm years$

Thus, the approximate difference in the ages of the two cars, which  depreciate to 60% of their respective original values, is 1.7 years.

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