Question

Maria bought a laptop computer for $850. The value of the computer depreciates about 25% each year. After 3 years, she decides to sell it to her younger brother. What is a fair price for the computer?

Answer 1

Answer: $358.59

Explanation:

`$$After one year the laptop computer's price is:$$\begin{aligned}&=\$ 850-\$ 850 * 25 \% \\&=\$ 850-\$ 212.5 \\&=\$ 637.5\end{aligned}$$`

`$$ Again two year the computer's price is:$$\begin{aligned}&=637.5-25 \% \text { of } 637.5 \\&=637.5-159.375 \\&=\$ 478.125\end{aligned}$$`

`\bold{\text { So a fair price for the computer is } \$ 358.59}`

`\begin{aligned}\\\bold{Or}\text { Simply Calculate as } &=(\text { Purchase price }) *(1-25 \%)^\text{time} \\&=850 *(1-0.25)^(3) \\&=850 *(0.75)^(3) \\\bold{&=\$358.59}\end{aligned}`

Answer 2

Using the depreciation formula:

start value x percent of value^time

850 x 0.75^3 = $358.59

answer: $358.59