QuestionA caravan was bought for $£ 20,000$. It depreciated by $11 \%$ in the first year. It then depreciated by a further 6\% each year over the next two years. Calculate the value of the caravan three years after it was bought.

Studdy Solution
Calculate the depreciation for the third year.
$\text{Depreciation for the third year} = 0.06 \times 16,732 = 1,003.92$
Subtract the depreciation from the value after the second year:
$\text{Value after third year} = 16,732 - 1,003.92 = 15,728.08$
The value of the caravan three years after it was bought is:
$\boxed{£15,728.08}$