On federal income tax returns, self-employed people can depreciate the value of business equipment. Suppose a computer valued at $2,150 depreciates at a rate of 40% per year. How many years will it take for the computer's value to be less than $325. Enter the number of years as a whole number.

Question

Triston Campbell

1 December, 08:30

+3

Answers (1)

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Sebastian Mcpherson · Answer 1

325=2150 (1-0.40) ^t

Solve for t

325/2150 = (1-0.40) ^t

Log (325/2150) = t*log (1-0.40)

t=log (325:2,150) : log (1-0.40)

t=3.69=4 years