Mike, the valet, was promised a salary of $\$8000$ and a car for a year of service. When Mike left the job after $7$ months of service, he received the car and $\$1600$ as his prorated salary. What was the dollar value of the car?
Prorating of salary problem
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algebra-precalculus
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1I think Graphth is right - "the time value of money" is a technical term in disciplines like accounting and investment, and is associated with features like compound interest and inflation. You have specified prorating of salary (which would not be abnormal in this kind of case) - but this has nothing to do with the technical term you have inadvertently used in your title. – 2012-09-17
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Hint: If we let $c$ be the value of the car, he was promised $8000+c$ for $12$ months. He got $1600+c$ for $7$ months. This means $\frac 7{12}(8000+c)=1600+c$
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0@Ctrl: I agree. Another way to see it is that working 5 more months was worth 6400, so working 7 months is 8960, leaving 7360 for the car. – 2012-09-18