Question

A construction company purchased some equipment costing $300,000. The value of the equipment depreciates

(decreases) at a rate of 14% per year.
b. What is the value of the equipment after 9 years?

Answer 1

$ 77,198.22

Explanation:

The value depreciates 14% per year, it means that for the first year, the value will be 0.86 of the initial value, the second year, 0.86 of the first, so 0.86x0.86 of it, and then successively. So, for t years:

`V(t) = 300,000*(0.86)^t`

V(9) = 300,000*(0.86)⁹

V(9) = $ 77,198.22