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You buy a new computer for $2100. The value of the computer decreases by about 50% annually. Estimate the value after 2 years and estimate when the computer will have a value of $600?

Guest May 15, 2017

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 #1
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FV = 2,100 x 0.5^2

FV = 2,100 x 0.25

FV =$525.00 projected value of the computer in 2 years.

 

$600 = $2,100 x 0.50^n  divide both sides by 2,100

0.2857143... = 0.50^n       take the log of both sides

n = Log(0.2857143) / Log(0.5)

n = 1.807....years, or 1 year and about 9.7 months, when the value drops to $600.

Guest May 15, 2017
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1+0 Answers

 #1
avatar
+1
Best Answer

FV = 2,100 x 0.5^2

FV = 2,100 x 0.25

FV =$525.00 projected value of the computer in 2 years.

 

$600 = $2,100 x 0.50^n  divide both sides by 2,100

0.2857143... = 0.50^n       take the log of both sides

n = Log(0.2857143) / Log(0.5)

n = 1.807....years, or 1 year and about 9.7 months, when the value drops to $600.

Guest May 15, 2017

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