Question

A business’s assets are valued at $600,000, and the value depreciates 20% per year. Using the formula V(t) = V0(b)t, what is V0, what is (b), and what is the value of the assets after 5 (t) years? Show your work.

t = 5
V0 =
(b) =
Value after 5 years:

Answer 1

The formula is
V (t)=V0(b)^t
V (t) the value of the assets after 5 (t) years ?
V0 current value of assets 600000
B=1-0.20=0.8
T 5 years

So the value of assets after 5 years is
V (5)=600,000×0.8^(5)=196,608