If a car depreciates at a rate of 5% per year and is worth $10,000 at the start of 2014, what will its value be at the end of 2014?

• A. $9,000
• B. $9,500
• C. $10,000
• D. $10,500

Answer: (B)

To find the value of the car at the end of 2014, we start with its initial worth of $10,000 and apply the depreciation rate of 5%.

First, we calculate the amount of depreciation for the year. This can be done by taking 5% of the initial value:

[

\text{Depreciation} = 5% \times 10,000 = 0.05 \times 10,000 = 500

]

Next, we subtract the depreciation from the initial value to find the value at the end of the year:

[

\text{Value at end of 2014} = 10,000 - 500 = 9,500

]

Therefore, the car's value at the end of 2014 will be $9,500. This indicates that after accounting for the annual depreciation, the value has appropriately decreased based on the percentage specified. The other options do not reflect the correct application of the depreciation rate to the original value.