Question

Barry just read that his computer, which costs $1,300 new, loses 25% of its value every year. If this estimate is accurate, how much will the computer be worth in 15 years?

Answer 1

Answer:

The value will be approximately $17.37 to the nearest cents

Step-by-step explanation:

Step 1: Write the given terms

Present value(pv)=$1300

rate of depreciation(r)=25%=25/100=1/4=0.25

time(t)=15 years

Step 2: Write the formula that can be used to get the Future value(fv).

When an item with a cost of pv loses its value by r% for t years, the Future value is calculated by using the following formula:

$fv = pv \times (1 - r) {}^{t}$

Step 3: Calculate the future value by substituting the values into the formula

$fv = 1300 \times (1 - 0.25) {}^{15 } \\ fv = 1300 \times 0.75 {}^{15} \\ fv = 1300 \times 0.01336461 \\ fv = 17.37249931 \\ fv = 17.37$