Asked by Kenny

A stereo is bought for $1500 and sold 4 years later for $800.

a) Find the depreciation equation.

b) Assuming the depreciation is linear, find the value of the stereo after the first five years of ownership.
Answered by Reiny
value = mt + 1500
when t = 4, value = 800
800 = 4m + 1500
4m = -700
m = -175

value = -175t + 1500

plug in t = 5 to find value
Answered by Henry
a. Vt = Vo - d*T*Vo.

Vt = Value after time t.
Vo = Initial value.
d = Depreciation rate per year expressed as a decimal.

1500 - 4d*1500 = 800, d = 0.117/yr.

b. V = 1500 - 0.117*5*1500 =



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