A farmer buys a new tractor for $154, 154,000 and assumes that it will have a trade-in value of $92, 92,000 after 10 years. The farmer uses a constant rate of depreciation to determine the annual value of the tractor.
+37093 92000 = 154000(1-i)^10
92000/154000 = (1-i)^10
.949788 = 1-i
i =.0502 equal 5.02 percent depreciation per year
