Mr Abaza bought a photocopier for his small business for 129

Mr. Abaza bought a photocopier for his small business for $1299. The value of the photocopier depreciates at a rate of 13% each year. Use the formula V = c(1 - 0.13)^t, where Vis the depreciated value, c is the initial cost, and t is the time in years, to determine the value of the photocopier after 4 years. A $555 B $1130 C $744 D $2267

Solution

The depreciated value of the photocopier is given by the formula V = c( 1- 0.13)^t where V is the depreciated value, c is the initial cost and t is the time in years. Here, c = $ 1299 and t = 4. Then V = 1299( 1 - 0.13)⁴ = 1299( 0.87)⁴ = 1299*0.57289761 = $744.1939954 = $ 744 ( on rounding off to the nearest Dollar). The answer C is correct.