Question

Depreciation is the decrease or loss in value of an item due to age, wear, or market conditions. We usually consider depreciation on expensive items like cars. Businesses use depreciation as a loss when calculating their income and taxes. One company buys a new bulldozer for $109600. The company depreciates the bulldozer linearly over its useful life of 16 years. Its salvage value at the end of 16 years is $17600. A) Express the value of the bulldozer, V, as a function of how many years old it is, t. Make sure to use function notation. B) The value of the bulldozer after 7 years is $

Answer 1

a. V = $109,600 - $5,750(t)

b. $69,350

Explanation:

a. The expression of the value of the bulldozer is as follows

V = $109,600 - (m) × (t)

where,

m = depreciation

t = time in years

Now the equation would be

$109,600 - 16(m) = $17,600

m = ($109,600 - $17,600) ÷ (16)

= $5,750

Now the expression would be

V = $109,600 - $5,750(t)

b. Now the value of the bulldozer is

= $109,600 - $5,750 × 7 years

= $109,600 - $40,250

= $69,350