A used car was purchased at N900,000.00. Its value depreciated by 30% in the first year. In each subsequent year, the depreciation was 22% of its value at the beginning of the year. If the car was bought on the 1st of March, 2011, calculate, correct to the nearest hundred naira, the value of the car on the 28th of February, 2015.
Explanation
Beginning of 1st year (March 2011 - February 2012) - N900,000
Depreciation (30%) = \(\frac{30}{100} \times N900,000\)
= N270,000
Price at the end of 1st year = N(900,000 - 270,000)
= N630,000.
Beginning of 2nd year (March 2012 - February 2013) - N630,000
Depreciation (22%) = \(\frac{22}{100} \times N630,000\)
= N138,600
Price at the end of 2nd year = N(630,000 - 138,600)
= N491,400.
Beginning of 3rd year (March 2013 - February 2014) - N491,400
Depreciation (22%) = \(\frac{22}{100} \times N491,400\)
= N108,108
Price at the end of the 3rd year = N(491,400 - 108,108)
= N383,292.
Beginning of 4th year (March 2014 - February 2015) - N383,292
Depreciation (22%) = \(\frac{22}{100} \times N383,292\)
= N84,324.24
Price at the end of the 4th year = N(383,292 - 84,324.24)
= N298,967.76 \(\approxeq\) N299,000 (to the nearest hundred naira).