Question

Brian buys a computer for £3600. It depreciates at a rate of 5% per year. How much will it be worth in 2 years? Give your answer to the nearest penny where appropriate.

Answer 1

£3591

Explanation:

Brian buys a computer for £3600. It depreciates at a rate of 5% per year. How much will it be worth in 2 years? Give your answer to the nearest penny where appropriate.

The formula for Depreciation rate =

P = Po × e^-rt

P = Amount after depreciation

Po = Initial amount = £ 3600

r = depreciation rate = 5% = 0.05

t = time in years = 2

Hence:

P = £3600 × e ^ -0.05 × 2

P =£ 3600 × e-0.0025

P = £ 3591.0112406

Approximately = £3591