Question

For accounting purposes, the value of assets (land, buildings, equipment) in a business are depreciated at a set rate per year. The value, V(t) of $537,000 worth of assets after t years, that depreciate at 17% per year, is given by the formula V(t) = Vo(b)t. What is the value of Vo and b, and when rounded to the nearest cent, what are the assets valued at after 9 years?

Vo = $537,000, b = 0.17, and the value after 9 years is $0.45
Vo = $537,000, b = 0.83, and the value after 9 years is $100,386.92
Vo = $537,000, b = 1.17, and the value after 9 years is $98,291.76
Vo = $537,000, b = 0.83, and the value after 9 years is $91,290.00

Answer 1

V(0)=$537,000

b=0.83

t=9

v (9)=100,386.92

Value after 9 years of depreciation at 17% per year

b = 1- r

b = 1 - 17% b = 0.83

Explanation:

V (t)=V(0) (b)^t

V (t) future value ?

Vo present value $537,000

b=0.83

T time =9 years

V (9)=537,000×(0.83)^(9)

v (9)=100,386.92

Value after 9 years of depreciation at 17% per year

b = 1- r

b = 1 - 17% b = 0.83