Using linear depreciation, how do you determine the value of a machine after 5 years if it costs $62310 when new and has a value of $32985 after 7 years?

1 Answer
Jan 19, 2018

Answer:

The value of the machine after #5# years is #$41364#

Explanation:

Initial cost of the machine is #y_1=$62310.00 , x_1=0#

Depriciated value of the machine after #x_2=7# years is

#y_2=$32985.00# .Linear depriciation slope per year is

#m= (y_2-y_1)/(x_2-x_1)or m=(32985.00-62310.00)/(7-0)#

#m=(32985.00-62310.00)/7# . Depriciated value of the

machine after #x=5# years is #y-y_1= m(x-x_1)# or

#y-62310= (32985.00-62310.00)/7*(5-0)# or

#y= 62310+ (32985.00-62310.00)/7*5# or

#y=62310-20946.43 or y ~~ $41363.57 ~~ $41364#

The value of the machine after #5# years is #$41364#