Question

A corporate jet originally cost $17,550,000. If its value depreciates by 5 percent per year, what will its value be after 10 years?

Answer 1

Answer:

It's value after 10 years will be $10,507,833.3

Step-by-step explanation:

The equation for the value of the jet after t years is:

$C(t) = C_{0}(1 - r)^{t}$

In which $C_{0}$ is the initial cost and r is the rate it decreases, as a decimal.

A corporate jet originally cost $17,550,000.

This means that $C_{0} = 17550000$

If its value depreciates by 5 percent per year, what will its value be after 10 years?

This is C(10) when r = 0.05. So

$C(t) = C_{0}(1 - r)^{t}$

$C(t) = 17550000(0.95)^{t}$

$C(10) = 17550000(0.95)^{10}$

$C(10) = 10507833.3$

It's value after 10 years will be $10,507,833.3