Question

A computer depreciates at a rate of 15% per year. If the computer is worth $324.50 when it is 5 years old, how much was it worth when it was new? Round your answer to two decimal places

Answer 1

the price of the new computer was
`\$ 731.34`

Step-by-step explanation:

let's assume that the price of the computer was
`\$ x` when it was new.

As price depreciates at a rate of 15% therefore we can mathematically express this situation when the computer is 5 yrs old as-

`x* (1-0.15)^(5)=324.50`

or,
`x* (0.85)^(5)=324.50`

or,
`x=(324.50)/((0.85)^(5))`

or,
`x=731.34`

So, the price of the new computer was
`\$ 731.34`