Question

A laptop computer is purchased for $1750. After each year, the resale value decreases by 25%. What will the resale value be after 5 years?

Answer 1

$415.28 Since the resale value drops by 25% per year, you can also say that the laptop retains 100%-25% = 75% of it's value each year. So after 5 years, it's worth 0.75^5 = 0.237304688 = 23.7304688% of its original value. So let's do the math: $1750 * 0.75^5 = $1750 * 0.237304688 = $415.28 So after 5 years, it's resale value is about $415.