A computer valued at $6500 depreciates at the rate of 14.3% per year. Find the value of the computer after three years.

Answer 1

A depreciation of 14.3% leaves you with 85.7%, right? Each year's value is 85.7% of the tear before.

6500(0.857)³ = $4091.25



Answer 2

Hi Brooke. What you do is to multiply $6500 x .143 (14.3% converts to .143). That gives you $934.50, which you subtract from $6500 to get $5565.50. That concludes year 1.

Then you take the $5565.50 x .143 to get $795.8665. (We don’t drop the extra digits yet). We subtract that from $5565.50 to get

$4769.6335. That concludes year 2.

Now we take $4769.6335 x .143 to get $682.0575905. We subtract that from $4769.6335 to get $4087.5759095. We round it off to the nearest cent, and this concludes year 3. The answer is $4087.58.

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