A tractor costs $10,000 and depreciates in value by 12% per year. How much will the tractor be worth after 8 years?

Answer 1

This is an example of exponential decay. The decay law for this problem is

C(t) = 10,000 (1 - 0.12)^t = 10,000 (0.88)^t

where t equals years elapsed. Plug in t=8 and evaluate.