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Mr Singh buys a computer for £2500 Each year the value of the computer depreciates by 7.2%. Calculate how much the computer is worth after 2 years.

User Yarek T
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1 Answer

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Final answer:

After 2 years, the computer Mr Singh bought for £2500, with an annual depreciation rate of 7.2%, is worth approximately £2149.76.

Step-by-step explanation:

Mr Singh buys a computer for £2500, and each year the value of the computer depreciates by 7.2%. To calculate how much the computer is worth after 2 years, we need to apply the depreciation formula twice, once for each year.

After the first year, the computer's value will be:

Value after 1 year = Initial value × (1 - depreciation rate)

Value after 1 year = £2500 × (1 - 0.072) = £2500 × 0.928 = £2320

After the second year, the computer's value will further depreciate by another 7.2%:

Value after 2 years = Value after 1 year × (1 - depreciation rate)

Value after 2 years = £2320 × (1 - 0.072) = £2320 × 0.928 = £2149.76

Therefore, after 2 years, the computer is worth approximately £2149.76.

User JasonSmith
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