You purchase a $987 computer, with a depreciation rate of 20%.

Question

 What's the value of your computer after 5 years? Round your answer to the dollar

Answer 1

The formula for depreciation is:

A=P(1-r)^t

where

A= the value of computer after t years

P= the original cost of computer = $987

r = the rate of depreciation = 20%/100 = .2

t = number of years the computer has been depreciated = 5 years

 

A=P(1-r)^_t

A=987(1-.2)⁵

A=$323.42 is the value of computer after 5 years