Answer:
The rate of depreciation is 11.87% per year.
Step-by-step explanation:
Given that a brand new car was purchased for $ 28,000 in year 2000, and the car value has dropped to $ 20,000 in year 2003, to determine what could be considered as the rate of depreciation, the following calculation must be performed:
20,000 x (1 + X / 1) ^ 3 = 28,000
20,000 x X ^ 3 = 28,000
20,000X ^ 3 = 28,000
X = 1.1187
Therefore, the rate of depreciation is 11.87% per year.
