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 1st January, 1980 was £10,250.00, what was its value in January 1989 when it was 9 years old? Give your answer, correct to three significant figures.

Question

Mathematics

Davon Zavala

22 October, 23:29

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 1st January, 1980 was £10,250.00, what was its value in January 1989 when it was 9 years old? Give your answer, correct to three significant figures.

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Answers (1)

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Buchanan · Answer 1

6460 pounds approx.

Step-by-step explanation:

Depreciation = P (1 - r/100) ^n [ n = time period, P = Principal and r = rate}

= 10,250 (1-5/100) ^9

= Approx. 6460 pounds