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The local parts shop buys a machine that costs $500,000. Its value depreciates exponentially each year by 10%.

What is the machine’s value after 5 years?

Respuesta :

fashonm26
1 year: $500,000 - 10% * $500,000 = 500,000 - 10/100 * 500,000 = $500,000 - $50,000 = $450,000

2 years: $450,000 - 10% * $450,000 = 450,000 - 10/100 * 450,000 = $450,000 - $45,000 = $405,000

3 years: $405,000 - 10% * $405,000 = 405,000 - 10/100 * 405,000 = $405,000 - $40,500 = $364,500

4 years: $364,500 - 10% * $364,500 = 364,500 - 10/100 * 364,500 = $364,500 - $36,450 = $328,050

5 years: $328,050 - 10% * $328,050 = 328,050 - 10/100 * 328,050 = $328,050 - $32,805 = $295,245

The correct result would be $295,000.
xxanaleexx
Let V be the machines' value. Every year, the machine loses 10% of its value; making it worth 90% of what it was the year before. So:

V=500000*(0.9)^5
V=500000*0.59049=$295245 as the value of the machine after 5 years. 
hopefully, this helps. 

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