Question

a local parts shop buys a machine that costs $500,000. its value depreciates exponentially each year by 10%. what is the machines value after 5 years? round to nearest integer

Answer 1

Hello!

Answer:

$295.295

Explanation:

Of the statement, we have that the price of the machine decreased 10% every year exponentially, so in the first year it real value drops to 90% of the costs. For 5 years, It can be expressed and simplified by the following equation:

We can't use that the percent drop as a percent itself, so we are going to divide 90% by 100%, and it will give us an entire number.

$\frac{90}{100}=0,9 \\ \\ Value=Costs.(0.9)^{years}$


By substituting we have:

$Value=500000.(0.9)^{5}$

Value: $295.245


Have a nice day!