Timothy paid $27,000 for a new truck. if the value of the truck depreciates 11% for each year of his ownership, what is the minimum number of years needed for the vehicle's value to be less than $10,000.

The minimum number of years needed for the vehicle's value to be less than $10,000 is 9 years

SOLUTION:

Given, Timothy paid $27,000 for a new truck.  

The value of the truck depreciates 11% for each year of his ownership,  

We have to find what is the minimum number of years needed for the vehicle's value to be less than $10,000.

Let the number of years be n.

Now we can use the below formula to find the minimum number of years.

Now, present value < 10000

Now, let us use trail and error method, put n = 8

Then, 0.3936 < 0.3703, wrong, so put n = 9, ⇒ 0.3503 < 0.3703 correct.

Hence, it takes 9 years.

answer: 40.95

step-by-step explanation: