Question

A construction company purchased some equipment costing $300,000. The value of the equipment depreciates

(decreases) at a rate of 14% per year.
a. Write a formula that models the value of the equipment each year.

Answer 1

Cost of equipment after n years = 300000 x 0.86ⁿ

Explanation:

A construction company purchased some equipment costing $300,000.

Price of equipment = 300000 $

The value of the equipment depreciates (decreases) at a rate of 14% per year.

Let c(n) be the cost of equipment after n years.

`\texttt{Cost of equipment after 1 year =}300000-(14)/(100)* 300000=0.86^1* 300000\$\\\\\texttt{Cost of equipment after 2 years =}0.86^2* 300000\$\\\\\texttt{Cost of equipment after 3 years =}0.86^3* 300000\$\\\\\texttt{Cost of equipment after n years =}0.86^n* 300000\$`

Cost of equipment after n years = 300000 x 0.86ⁿ