Problema Solution
Merlin industries bought a laptop for $2,100. It is expected to depreciate at a rate of 14% per year. What will the value of the laptop be in 5 years? Round to the nearest dollar.
Answer provided by our tutors
Depreciation equation: V = P(1- r)^n (^ is an exponent)
V = current Value
P = original Purchase price
r = rate of depreciation (as a decimal)
n = number of years.
14% = 0.14
V = 2100(1 - 0.14)^5
V = 2100(0.86)^5
V = 987.8967
V = 987.90 (rounded)
The laptop will be worth $987.90 after 5 years