Question

The local parts shop buys a machine that costs $500,000. Its value depreciates exponentially each year by 10%. What is the machine’s value after 5 years? Round your answer to the nearest integer.

Answer 1

The value of the machine depreciates exponentially which mean it is constantly decreasing by 10% every year. So in five years, the $500,000 would be decreasing by 50% which means its value will be half of its original price. This will leave the machine with $250,00 price for the market.