Question

Merlin industries bought a laptop for $2100. 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.

Answer 1

This is exponential growth/decay function, in this case decay, of the form:

f=ir^t, f=final value, i=initial value, r=common ratio or "rate", and t=times rate is applied or "time".

In this case i=2100 and r=(100-14)/100=0.86 so the equation is:

f=2100(0.86^t) and in five years...

f(5)=2100(0.86^5)

f(5)≈$987.90 (to nearest whole cent)