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# compound interest and depreciation

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the price of softwood changes each year the price has increased by 6% per annum for the past 5 years before this the price decreased by 2% per annum seven years ago the price of softwood was 34 per meter cubed

Guest Sep 28, 2017
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#1
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So.....I assume you want to know the current price???

If so  ....after the first two years, the price was  34 (.98)^2  ≈  32.65  per m^3

[ each successive year the price was 98% = .98  of the year before]

And in the next five years   it increased  to  its current price of    32.65 (1.06)^5  ≈  43.69 per m^3

[each successive  year after the second one,  the price rose by 6%   = 1 + .06 =    1.06 ]

Thanks to the guest for spotting my earlier error....I'm not with it today....LOL!!!!!

CPhill  Sep 28, 2017
edited by CPhill  Sep 28, 2017
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CPhill: A slight error of transposition from \$32.56 to \$32.65.

Guest Sep 28, 2017

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