1. ## Depreciation

How would you work this out:

A company bought a new truck. Each year the value of the truck depreciates by 20%. The value of the new truck can be mulitiplied by a number to find its value at the end of the four years. Find this number as a decimal.

Thanks

How would you work this out:

A company bought a new truck. Each year the value of the truck depreciates by 20%. The value of the new truck can be mulitiplied by a number to find its value at the end of the four years. Find this number as a decimal.

Thanks
Hello,

the actual value of the truck can be calculated by:

$v(t) = v_0 \cdot (0.8)^t$ where $v(t)$ is the value after t years and $v_0$ is the initial value (price for the new truck).

Now plug in t = 4 and you'll get:

$v(4) = v_0 \cdot (0.8)^4 = 0.4096 \cdot v_0$

3. Originally Posted by earboth
Hello,

the actual value of the truck can be calculated by:

$v(t) = v_0 \cdot (0.8)^t$ where $v(t)$ is the value after t years and $v_0$ is the initial value (price for the new truck).

Now plug in t = 4 and you'll get:

$v(4) = v_0 \cdot (0.8)^4 = 0.4096 \cdot v_0$

Where did the 0.8 come from?