Daniels print shop purchased a new printer for $35,000. each year it depreciates at a rate of 5%

which formula can be used to find out how much the printer will be worth in 8 years?

1 answer

To calculate the future value of an asset that depreciates at a constant rate, you can use the formula for exponential decay. The formula for the value \( V \) of the printer after \( t \) years can be expressed as:

\[ V = P(1 - r)^t \]

where:

  • \( V \) is the value of the asset after \( t \) years,
  • \( P \) is the initial purchase price of the printer,
  • \( r \) is the depreciation rate (in decimal form),
  • \( t \) is the number of years.

Given the values:

  • \( P = 35,000 \)
  • \( r = 0.05 \) (which is 5%)
  • \( t = 8 \)

You can substitute these values into the formula:

\[ V = 35000(1 - 0.05)^8 \]

Simplifying further:

\[ V = 35000(0.95)^8 \]

Now you can calculate \( (0.95)^8 \) and then multiply by 35,000 to find the value of the printer after 8 years.