Question

The value of a machine depreciates each year by 5% of its value at the beginning of that year. If its value when new on January, 1980 was %10,250.00, what was it value in January 1989 when it was 9 years? Give your answer to three significant figures.

Answer 1

Value after 9 years = 10,250 × (0.95)^9.

(0.95)^9 ≈ 0.63024941, so value ≈ 10,250 × 0.63024941 ≈ $6,460.06.

To three significant figures: $6,460.