Question

A computer is worth $4000 when it is new. After each year it is worth half what it was the previous year. What will its worth be after 4 years? Round your answer to the nearest dollar.

Answer 1

Answer: $250

Explanation:

The computer reduces by half of its value every year. It is originally valued at $4,000 so the value in 4 years can be calculated by the formula:

= 4,000 * 0.5 ^ number of years

= 4,000 * 0.5⁴

= $250

Another method is to reduce by half every year:

First year = 4,000 / 2 = $2,000

Second year = 2,000 / 2 = $1,000

Third year = 1,000 / 2 = $500

Fourth year = 500 / 2 = $250