Question

Timothy purchased a computer for $1000. The value of the computer depreciates by 20% every year.

Answer 1

Answer:

We can apply the straight-line method to solve for the value of the computer every year.

Step-by-step explanation:

Step one:

What is depreciation?

It can be defined as the loss of value of a commodity.

In this problem, the percent depreciation is given as 20% which means that 20% of the worth of the computer is lost every year.

We are told that the computer cost is $1000

let the number of years taken for the computer to depreciate be x

Step two:

Say we want to find the value of the computer after 1 year, the value of the computer will be

Value of computer= 1000-20/100*1000

Value of computer= 1000-0.2*1000

Value of computer= 1000-200

Value of computer= $800

Step three:

For the second year, the value will be

Value of computer= 800-20/100*800

Value of computer= 800-0.2*800

Value of computer= 800-160

Value of computer= $640

Answer 2

Answer:

This situation represents exponential decay. The rate of growth or decay, r, is equal to 0.2. So the value of the computer each year is 80% of the value in the previous year. It will take 3 years for the value of the computer to reach $512.

Step-by-step explanation:

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