For us to be able to determine the worth of the car in two years, we will be using the depreciation formula:
[tex]\text{ FV = PV(1 - }\frac{r}{100})^n[/tex]Where,
PV = Current value of the car
r = rate of interest
n = number of years
FV = Future value
Given:
PV = 11,000
r = 14%
n = 2 years
We get,
[tex]\text{ FV = PV(1 - }\frac{r}{100})^n[/tex][tex]\text{= (11,000)(1 - }\frac{14}{100})^2[/tex][tex]\text{= (11,000)(1 - }0.14)^2[/tex][tex]\text{= (11,000)(}0.86)^2[/tex][tex]\text{= (11,000)(}0.7396)[/tex][tex]=\text{ 8,135.60}[/tex]Therefore, the answer is 8,135.60
