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A jet ski depreciates at 11% of its original value each year. If the jet ski was $8000 at its time of purchase, what is the value of the jet ski after 5 years?


$13,480.47


$7,120.00


$6,958.86


$4,467.25

Verified Answer :

Kalahira

The correct answer would be D) $4,467.25. This should be calculated compoundedly, as depreciation does not work in a linear fashion. Year 1 depreciation would be 11% of $8000 = $7120. Year 2 depreciation would be 11% of $7120 = $6336.80. Year 3 would be so on until you reach Year 5 and you get the final value as $4467.25.

abiolataiwo2015

If the jet ski was $8000 at its time of purchase, the value of the jet ski after 5 years is: $4,467.25.

What is Depreciation?

First step

Depreciation for year 1=(1-11%) ×$8000

Depreciation for year 1 = $7,120

Second step

Depreciation for year 2=(1-11%)  ×$7120

Depreciation for year 2= $6336.80

Third step

Depreciation for year 3= (1-11%) ×$6336.80

Depreciation for year 3= $5,639.75

Fourth step

Depreciation for year 4=  (1-11%) ×$5,639.75

Depreciation for year 4=$5,019.38

Fifth step

Depreciation for year 5= (1-11%) ×$5,019.38

Depreciation for year 5= $4467.25

Therefore  the value of the jet ski after 5 years is: $4,467.25.

Learn more about depreciation here: https://brainly.com/question/1287985

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