Answer:
a. 26
Step-by-step explanation:
The formula for depreciation is given as
y = a(1 - r)^t
a = Initial value = $15,500
y = Current value = 1/10 of Initial value = $1,550
r = depreciation rate = 8.5% = 0.085
t = time in years = ?
Hence,
1550 = 15500(1 - 0.085)^t
1550 = 15500(0.915)^t
Divide both sides by 15500
1550/15500 =(0.915)^t
0.1 = (0.915)^t
Take the Logarithm of both sides
log 0.1 = log(0.915)^t
log 0.1 = t log (0.915)
Divide both sides by log 0.915
t = log 0.1/log 0.915
t = 25.920900964 years
Approximately Time t = 26 years
Option a is correct
