Question

A machine that originally cost $15,600 has a value of $7500 at the end of 3 years. the same machine has a value of $2800 at the end of 8 years. find the average rate of change in value (depreciation) of the machine between its purchase and the end of 3 years. a. -$3200 per year c. $-5400 per year b. -$2700 per year d. $2700 per year

Answer 1

A) The rate for the first 3 years :

15,600 - 7500 = 8100

8100/3 years = 2,700 per year depreciation.

B) The rate between 3 and 8 years:

7500 - 2800 = 4700

4700 / 5 year = 940 per year depreciation.

C) the value of the machine depreciated at a higher rate in the first 3 years. After the first 3 years, the depreciation rate decreased.