# Thread: value of a new car as a function of time for a period of 20 years

1. ## value of a new car as a function of time for a period of 20 years

Hi, With this question i understand its very easy and im an ediot for asking, i origialy thought it was the first one because the value is dropping slowly, since the car is very looked after. Since its not the first one it must be the last one. The question is in the attachment

Sketch a rough graph of the market value of a new car as a function of time for a period of 20 years. Assume the car is well maintained.

2. ## Re: value of a new car as a function of time for a period of 20 years

Obviously, a car will lose value over 2- years so you can immediately eliminate the lower left graph. To choose among the other possible answers consider "A new automobile loses about 10% of its value as soon as you drive it off the dealer's lot!" and "A new car will lose about 50% of its value in the first two years". That is, the graph will drop most sharply at first.

3. ## Re: value of a new car as a function of time for a period of 20 years

The anual depreciation rate of a car is estimated from 12-15% depending on the usage and model . However luxury cars have different depreciation rates.