Question

Colin buys a tv for £740. It depreciates at a rate of 4% per year. How much will it be worth in 5 years? Give your answer to the nearest penny where appropriate.

Answer 1

Given :

Colin buys a tv for £740. It depreciates at a rate of 4% per year.

To Find :

How much will it be worth in 5 years.

Solution :

Decrease in price in 1 year is :

$P = P_o- P_o\times 0.04\\\\P = 0.96P_o$

So, decrease in price after x years is :

$P = (0.96)^x P_o$

Putting value of x and $P_o$ in above equation, we get :

$P = 0.96^5\times 740\\\\P = \£\ 603.38$

Therefore, the worth of T.V after 5 years is £603.38 .