Question

A company buys a new bulldozer for $105100. The company depreciates the bulldozer linearly over its useful life of 21 years. Its salvage value at the end of 21 years is $10600. Depreciation is the decrease or loss in value of the equipment due to age, wear, or market conditions.

A) Express the value of the bulldozer, V, in terms of how many years old it is, t.
V
=
V
=

B) The value of the bulldozer after 10 years is $.

Answer 1

(A) V = 105100 -4500t

(B) $60,100

Explanation:

A)

The loss in value due to depreciation over the useful life is ...

$105,100 - 10,600 = $94,500

The depreciation is linear over the 21 year life, so 1/21 of this value is lost each year:

$94,500/21 = $4,500 . . . . . loss of value each year

After t years, the loss of value is 4500t. This amount is subtracted from the initial value to find the value after t years:

V = 105100 -4500t . . . . value after t years

__

B)

The value of the bulldozer after 10 years is found by evaluating this function with t=10:

V = 105100 -4500(10) = 60,100

The value after 10 years is $60,100.