Question

A laptop computer is purchased for $2000. After each year, the resale value decreases by 25%. What will the resale value be after years?

Use the calculator provided and round your answer to the nearest dollar.

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Answer 1

2000? ... assume $2000

Resale Value = $2000*(1 - 0.25)t/yr

where: t = number of year after purchase

at t = 3 yr

Resale Value = $2000*(1 - 0.25)3 = $843.75

checking: at t = 0 $2000 (purchase price)

at t = 1 yr $2000 - 0.25*$2000 = $2000 - $500 = $1500

at t = 2 yr $1500 - 0.25*$1500 = $1500 - $375 = $1125

at t = 3 yr $1125 - 0.25*$1125 = $1125 - $281.25 = $843.75