The graph to the right represents the value of a copy machin

The graph to the right represents the value of a copy machine, in dollars, in terms of the number of years since purchase, t. a. Determine the average rate of change form t = 1 to t = 3. b. Provide the practical meaning of this average rate of change in terms of the copy machine\'s value.

Solution

4. The value of the copy machine 1 year after purchase was $ 4800 and after 3 years, the value dropped to $900.Thus, the average rate of change in the value of the copy machine from t = 1to t = 3 is (-4800+900)/(3-1) = -3900/2 =   $ -1950 per year. The negative sign represents a decrease in value of the copy machine.

The decrease in value of the copy machine represents depreciation. The average rate of change in value represents average annual depreciation. Further, if the values given here are market values, then the averge rate of change represents average reduction in market value of the copy machine per year. However, in case the values given here are book values, then the averge rate of change represents average reduction in book value, i.e the depreciation in the value of the copy machine per year in the books of the owner.