Question

the cost of a television set is $6980 after three years it deprecates by 6% per annum. if you want to sell this television set what is its value?

Answer 1

The initial cost of the Television is $6980

rate of deprication = 6% = 0.06

The Value of the television after 3 years will be obtained using the formula:

$P=P_0\text{ (1 - }\frac{r}{100})^t$

Where Po is the initial price = $6980

t = 3 years

and r = rate = 6 %

$P\text{ = }6980\text{ (1 -}\frac{6}{100})^3$$P=6980(1-0.06)^3$

$P=6980(0.94)^3$

P = 6980 x 0.83

P = $ 5793.4