For accounting purposes, the value of assets (land, buildings, equipment) in a business are depreciated at a set rate per year. The value, V(t) of $408,000 worth of assets after t years, that depreciate at 18% per year, is given by the formula V(t) = Vo(b)t. What is the value of Vo and b, and when rounded to the nearest cent, what are the assets valued at after 8 years?

ANSWERS

2015-11-01 00:45:04

The formula V(t) = Vo(b)^t Vo is the value of assets 408000 b=1-r R rate of depreciation 0.18 b=1−0.18=0.82 T time ( number of years ) So after 8 years the value of the assets is V (8)=408,000×(0.82)^(8)=83,400.94 Round your answer to get 83401 Hope it helps!

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