Arithmetic Reasoning Answer
Depreciation is one of the topics I cover in my ASVAB prep course. In working as an ASVAB tutor, I find that most of my students understand the concept of depreciation. Even though they understand that certain items lose value over time, such as a car, they do not usually know now to solve this problem.
Yesterday I presented an Arithmetic Reasoning question. The topic is depreciation.
The question is:
If Tom’s car is worth $9,000 and depreciates by 7% per year, how much will his car be worth in 2 years?
- $7740.30
- $7784.10
- $8370.20
- $8860.00
This is a four-step problem.
The first step you need to do if figure out what 7% of $9,000 is.
Change percent to a decimal.
7% = .07
For Year 1, multiply 9,000 by .07.
9,000 x .07 is 630.00
Then subtract 630 from 9000.
9000 – 630 = 8370.
The car Is worth $8370 at the start of Year 2.
Multiply 8370 by .07.
8370 x .07 = 585.90
Subtract 585.90 from 8370.
Add on a decimal and 2 zeroes to 8370.
8370 becomes 8370.00.
Line up the decimals and subtract.
8370.00 – 585.90 = 7784.10
The answer is $7784.10
The correct choice is B. $7784.10
Did you know how to solve this problem?
