Problema Solution
Zeus industries bought a computer for $2500. It is expected to depreciate at a rate of 20% per year. What will the value of the computer be in 2 years?
Answer provided by our tutors
The value of the computer now: $2,500
After 1 year: 2,500 - 0.20*2,500 = 0.80*2,500
After 2 years: 0.80*2,500 - 0.20*0.80*2,500 = 0.80*0.80*2,500 = $1,600
The value of the computer in 2 years will be $1,600.