Problema Solution
Michelle Buys in motorcycle for 10,000. The motorcycle loses 20% of it value each year. The depreciation of the motorcycle. After how many years is the value the Motorcycle worth 6400
Answer provided by our tutors
Present value: 10,000
After 1 year: 0.80*10,000
After 2 years: (0.80^2)*10,000
After 'n' years: (0.8^n)*10,000
We need to find n such that (0.8^n)*10,000 = 6,400 that is solve the equation:
(0.8^n)*10,000 = 6,400
0.8^n = 6400/10000
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click here to see the equation solved for n
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n = 2 years
After 2 years the value of the motorcycle will be $6,400.