Question

The value of Erica's computer system depreciates at a rate of 26% per year. If she paid $1750 for it 2 years ago, what is the value of the system now?

a.) $1225
b.) $1369
c.) $1445
d.) $1030

Answer 1

Erica's computer system has depreciated to a current value of $957.80 after two years, considering a 26% annual depreciation, which does not match any of the answer choices provided.

Step-by-step explanation:

To calculate the current value of Erica's computer system, which depreciates at a rate of 26% per year, we need to apply the formula for exponential decay:

Value = Original Price × (1 - Rate of Depreciation)Number of Years

So, for Erica's computer system:

• 
  
• Original Price = $1750
• 
  
• Rate of Depreciation = 26% or 0.26
• 
  
• Number of Years = 2

Plugging these values into the formula, we get:

Value = $1750 × (1 - 0.26)2

This simplifies to:

Value = $1750 × (0.74)2

Value = $1750 × 0.5476

Value = $957.80

It appears that none of the answer options provided directly match the calculated value ($957.80), which suggests there might be a typo or error in the question or answer choices. Therefore, based on the correct calculations, the value of the computer system after 2 years of depreciation would be less than the provided options.