The value of a $1,200 computer decreases 27% annually. What will be the value of the computer after 3 years?

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Answer 1 · 2017-03-31T09:05:20

#V = $466.82#

Note that the decrease is compounded. the amount by which the value drops changes every year. Use the formula for compound interest.

#V = P(1-r)^n" "larr# r is the % as a decimal

#V = 1200(1-0.27)^3#

#V = 1200(0.73)^3#

#V = $466.82#

The same result would be obtained by showing the decrease every year, for 3 years. Find #73%# of the value of the previous year.

Value = #1200 xx 73% xx 73% xx73%#

#V = $466.82#