Answer:
The value of the equipment in 15 years will be $25,736
Step-by-step explanation:
The value of the equipment after t years is given by the following equation:
[tex]V(t) = V(0)(1-r)^{t}[/tex]
In which V(0) is the initial value and r is the yearly depreciation rate, as a decimal.
A piece of manufacturing equipment valued at $125000 depreciates at a steady rate of 10% per year.
This means that [tex]V(0) = 125000, r = 0.1[/tex]
Then
[tex]V(t) = V(0)(1-r)^{t}[/tex]
[tex]V(t) = 125000(1-0.1)^{t}[/tex]
[tex]V(t) = 125000(0.9)^{t}[/tex]
What is the value of the equipment in 15 years?
This is V(15).
[tex]V(15) = 125000(0.9)^{15} = 25736[/tex]
The value of the equipment in 15 years will be $25,736
