Quantitative Literacy Practice Exam

How much will a car worth $20,000 in 2012 be worth now if it depreciates at $1200 per year?

1. $10,000

2. $9,200

3. $11,000

4. $8,000

The correct answer is: $9,200

To determine the current value of the car that was worth $20,000 in 2012 and is depreciating at a rate of $1,200 per year, you first need to find out how many years have passed since 2012. Assuming the current year is 2023, that makes it 11 years since the original value was determined. You can calculate the total depreciation over these 11 years by multiplying the annual depreciation by the number of years: Total Depreciation = Annual Depreciation × Number of Years Total Depreciation = $1,200 × 11 = $13,200 Next, subtract the total depreciation from the original car value to find its current worth: Current Value = Original Value - Total Depreciation Current Value = $20,000 - $13,200 = $6,800 Since it seems like the current value calculation leads to a different conclusion than the provided answer, we can revisit the calculations or context to ensure accurate values align with the depreciation scenario. Keep in mind that annual depreciation accumulates year over year, significantly affecting the car's value over time. In this case, it’s essential to note that depreciation reduces the car's value, representing a diminishing asset