Question is in description Please help me answer

Question

A laptop computer is purchased for
$2200. After each year, the resale value decreases by
30%  What will the resale value be after
5 years? Round your answer to the nearest dollar.

Answer 1

Andrea, if we lose 30% each year, then the new value is 70% of the old, right?

 

So, after year 1, we have $2200(0.7) = $1540. The next year is $1540(0.7), etc.

 

Shorthand for this is $2200(.0.7)^x, with x being the number of years. Replace the x with a 5 in your calculator for your answer. Don't forget the rounding!

Answer 2

Andrea,

 

This is really a question about depreciation. If the value decreases by 30% each year, then the value after each year is 70% of the previous year's value. To find the resale value after 5 years, you can multiply $2200 by 0.7 five times, or compute

 

2200(0.7)⁵ = $369.75.