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Colin buys a tv for £690. It depreciates at a rate of 2% per year. How much will it be worth in 6 years? Give your answer to the nearest penny where appropriate.

User Felix C
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1 Answer

13 votes

Answer: £611.23

Explanation:

The tv is depreciating at a rate of 2% per year. At this rate, the value after 6 years can be acquired using the future value formula:

= Current price * (1 + growth rate) ^ no. of years

Growth rate is negative because it is depreciating:

= 690 * (1 - 2%)⁶

= ‭611.23124279616‬

= £611.23

User Daniel Kenney
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