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Janice Wants to Buy a New Car

question 60

Essay

Janice wants to buy a new car.The cost is $30,000.At the end of six years,the car is expected to be worth 20% of the original price.
a.
What will the car value be in six years?
b.
What is the annual depreciation on the car?


Definitions:

Earning Power

The ability of a company to generate profit from its operations over time.

Stock Portfolio

A collection of stocks held by an individual or institution, designed to achieve specified financial goals.

Bond Portfolio

A collection of bonds held by an individual or institution as an investment strategy to diversify risk and generate income.

Maturity

The final payment date of a loan or financial instrument, at which point the principal (and all remaining interest) is due to be paid.

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