Respuesta :
£7200
In first year depreciates by 20%, that is it is worth 80% of it's original value
80% = [tex]\frac{80}{100}[/tex] = 0.8
value after 1 year = 0.8 × £10000 = £8000
In the second year it depreciates by 10% of it's value, that is it is worth 90% of it's value at the end of the first year.
90% = [tex]\frac{90}{100}[/tex] = 0.9
value after 2 years = 0.9 × £8000 = £7200
The value of Danny's car at the end of two years as per compound interest will be £7200.
What is compound interest?
"Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on principal plus interest."
Given, Danny brought a car for £10000.
The value of the car depreciated by 20% in the first year.
The value of the car depreciated by 10% in the second year.
Here, Principle(P) = £10000
Depreciation value in the first year is(r₁) = 20% = 0.20.
Depreciation value in the second year is(r₂) = 10% = 0.10
Therefore, after first year, the value of the car will be
= P(1 - r₁)
= £10000(1 - 0.20)
= £8000
Therefore, after second year, the value of the car will be
= P(1 - r₂)
= £8000(1 - 0.10)
= £7200
The value of Danny's car at the end of two years will be £7200.
Learn more about compound interest here: https://brainly.com/question/16678480
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