Machine Depreciation

00:00 5 marks

A machine was purchased for $12000. Its value depreciates by 15% each year.

(a) Find the value of the machine after 5 years. [3]

(b) Find the number of years it takes for the machine’s value to fall below $2000. [2]

Part a

4 minutes 3 marks

Question

Find the value of the machine after 5 years. [3]

Hint Hint

Hint

Use $V = P(1 – r)^n$ with $P=12000$, $r=0.15$, $n=5$.

Answer Answer
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Explanation Explanation

Answer Answer

Complete Answer

$5324.46

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Part b

3 minutes 2 marks

Question

Find the number of years it takes for the machine’s value to fall below $2000. [2]

Hint Hint

Hint

Solve $12000(0.85)^n<2000$ with logarithms, then round up.

Answer Answer
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Explanation Explanation

Answer Answer

Complete Answer

12 years

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