Answer:
Part 1) [tex]\$3,376.53[/tex]
Part 2) [tex]\$8,806.55[/tex]
Step-by-step explanation:
Part 1) we know that
The compound interest formula is equal to
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest in decimal
t is Number of Time Periods
n is the number of times interest is compounded per year
in this problem we have
[tex]t=4\ years\\ P=\$3,000\\ r=0.03\\n=1[/tex]
substitute in the formula above
[tex]A=\$3,000(1+\frac{0.03}{1})^{1*4}=\$3,376.53[/tex]
Part 2) we know that
The formula to calculate how much will the tractor be worth after t years is equal to
[tex]P=C(1-r)^{t}[/tex]
where
C is the original cost
P is the depreciated value
r is the rate of depreciation in decimal
t is the number of years
in this problem we have
[tex]t=3\ years\\ C=\$14,340\\ r=0.15[/tex]
substitute the values
[tex]P=\$14,340(1-0.15)^{3}=\$8,806.55[/tex]
