A new car cost $25,000. If its value depreciates by 10% in the first year and then by another 10% of its new value in the second year, what is the car's value after two years?

A $20,000

B $20,250

C $21,000

D $22,500

✓ Correct Answer: Option B

After the first year, the car's value is $25,000 * (1 - 0.10) = $25,000 * 0.90 = $22,500. After the second year, its value depreciates from this new amount: $22,500 * 0.90 = $20,250.

💡 Why is B) the correct answer?

The correct answer to the question "A new car cost $25,000. If its value depreciates by 10% in the first year and then by another 10% of its *new* value in the second year, what is the car's value after two years?" is Option B: $20,250.

The other options — A) $20,000, C) $21,000, D) $22,500 — are incorrect for this GED Exam Prep question. As explained above: After the first year, the car's value is $25,000 * (1 - 0.10) = $25,000 * 0.90 = $22,500. After the second year, its value depreciates from this new amount: $22,500 * 0.90 = $20,250.

📚 About This GED Exam Prep Practice Question

This 4-level GED Exam Prep question from the Mathematical Reasoning topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free GED Exam Prep practice test or use flashcards for spaced repetition review.

Practice GED Exam Prep Quizzes → Browse All Questions Study Flashcards

A new car cost $25,000. If its value depreciates by 10% in the first year and then by another 10% of its *new* value in the second year, what is the car's value after two years?

✓ Correct Answer: Option B

📚 About This GED Exam Prep Practice Question

Related GED Exam Prep Questions

A new car cost $25,000. If its value depreciates by 10% in the first year and then by another 10% of its new value in the second year, what is the car's value after two years?