Question

Merlin Industries bought a laptop for $2,100. It is expected to depreciate at a rate of 14% per year. What will the value of the laptop be in 5 years? Round to the nearest dollar.

Question 4 options:

$912

$988

$1,806

$4,043

Answer 1

$988

Explanation:

`100\%-14\%=86\%=0.86\\\\0.86\cdot\$2,100-\text{after the first year}\\0.86\cdot(0.86\cdot\$2,100)=0.86^2\cdot\$2,100-\text{after the second year}\\0.86\cdot(0.86^2\cdot\$2,100)=0.86^3\cdot\$2,100-\text{after the third year}\\\vdots\\0.86^5\cdot\$2,100\approx\$988-\text{after the fifth year}`

Answer 2

988

A year later will depreciate $294

The following year $253

On the third year $217

The fourth year. $187

And the 5th year. $161