The value of a machine, V, at the end of t years is given by V=C(1-R)t , where C is the original cost and r is the rate of depreciation. Find the value of a mac

Question

The value of a machine, V, at the end of t years is given by V=C(1-R)^t , where C is the original cost and r is the rate of depreciation. Find the value of a machine at the end of 4 years if the original cost was $1080 and r=0.2.... Round to the nearest cent. 

Answer 1

This is a problem that simply involves plugging in variables. For your problem, C = $1080 (the original cost), r = 0.2 (the rate of depreciation), and t = 4 (years that have gone by). Solve for V:

 

V = (1080)(1 - 0.2)⁴

V = (1080)(0.8)⁴

V = (1080)(0.4096)

V = 442.368

 

Rounding to the nearest cent, the value of the machine is $442.37.