The cash value of the computer system in 3 years will be $1632. The correct option is the third option $1632
Depreciation
From the question, we are to determine the cash value of the computer system in 3 years
From the given information,
The computer system cost $2,395 and it will depreciate at a rate of 12% a year
After the first year, the worth of the computer system will be
$2,395 - (12% of $2,395)
$2,395 - (0.12 × $2,395)
= $2,395 - $287.4
= $2107.6
After the second year, the worth of the computer system will be
$2107.6 - (12% of $2107.6)
$2107.6 - (0.12 × $2107.6)
= $2107.6 - $252.912
= $1854.688
After the third year, the worth of the computer system will be
$1854.688 - (12% of $1854.688)
$1854.688 - (0.12 × $1854.688)
= $1854.688 - $222.56256
= $1632.12544
≅ $1632
Hence, the cash value of the computer system in 3 years will be $1632. The correct option is the third option $1632
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