Question

A desk is purchased for $277. What is its worth after depreciating for 5 years if its depreciation rate is 20% per year?

a) $44.32
b) $53.55
c) $61.12
d) $78.67

Answer 1

After calculating the desk's value over 5 years with a 20% annual depreciation rate, the final worth of $90.79 does not match any of the provided choices of $44.32, $53.55, $61.12, or $78.67, indicating a potential issue with the available answers.

Step-by-step explanation:

The question asks for the value of a desk after depreciating for 5 years with a depreciation rate of 20% per year. To find the worth of the desk after 5 years, we can use the formula for straight-line depreciation, which is:

Final Value = Initial Value × (1 - Depreciation Rate) ^Number of Years

Plugging the values into the formula, we get:

Final Value = $277 × (1 - 0.20) ^5

Final Value = $277 × (0.8) ^5

Final Value = $277 × 0.32768

Final Value = $90.78736, which is not an option provided. Given the options $44.32 b) $53.55 c) $61.12 d) $78.67, none of them match the calculated value.