Question

Suppose you have $15,000 in equipment for your business. You expect

the equipment will be worth 10% less each year.

a. Your friend says the equipment will be worth nothing in 10 yr, since
that would be 100% depreciation. Explain why that is incorrect.

b. Write an equation for this depreciation.

C. Find how much the equipment will be worth in 10 yr.

Answer 1

Explanation:

a. Because the base/number you're taking 10% away from changes each time

b. (year - 10% x yr.) x 10 = amount worth in 10 yrs.

c. $15,000 x 10% = $1,500

$15,000 - $1,500 = $13,500 (the amount of $ your equipment is worth after 1 yr.)

$13,500 x 10% = $1,350

$13,500 - $1,350 = $12,150 (the amount of $ your equipment is worth after 2 yrs.)

continued on .. until 10th yr.