A laptop computer that costs 1150 new has a book value of 55

A laptop computer that costs $1150 new has a book value of $550 after 2 years. Find the exponential model V = ae^kt What is value of the laptop after 3 years?

Solution

a)    V = ae^(kt)

You are given two points, (t, V): (0, 1150) and (2, 550)

    1150 = ae^0 = a

   And 550 = a*e^(k*2) = 1150*e^(2k) =====> k = -0.3688

Then   V = 1150*e^(-0.3688*t)

b) V = 1150*e^(-0.3688*3) = $380.36