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?
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.
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.
