Question

Depreciation:
A construction company purchases a bulldozer for $160,000. Each year the value of the buldozer depreciates by 20% of its value in the preceeding year. Let V sub n be the value of the bulldozer.(Let n=1 be the year the bulldozer purchase.)
a.) Find the Formula.
b.) In what year will the value of the bulldozer be less than $100,000?

Answer 1

each year its worth is 80% = 0.8 of its previous value. If Vn is the value at the end of year n, then

Vn = 160000 * 0.8^n

Answer 2

4 years