 Fion's car is worth £2,400. Every year, the value of the car decreases by 18% from its value at the beginning of the year. What is the reduction in value of the car after two years? Firstly, let's concentrate on the important facts. The original cost is £2,400 and the depreciation is 18% every year. As the depreciation is constant every year, it is possible to use powers or index. As the depreciation means less than the original price, we need to subtract the depreciation percentage which is 18% out of the 100% which is the original value of the car. 100 minus 18 is 82. To change this percentage, 82% to a decimal, 82% is 82 divided by 100 or 0.82. The original cost needs to be multiplied by this value to the power of number of years which is 2. Then, we will need to use a calculator. 2400 times 0.82 to the power of 2 is equal to £1,613.76. This is the value of the car after the depreciation. We now need to find out how much it has reduced by subtracting the new cost from the original cost. £2,400 take away £1,613.76 is equal to £786.24. This is the reduction of the original value of the car after two years.