Thread: 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

Originally Posted by GAdams

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:

where is the value after t years and is the initial value (price for the new truck).

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

Originally Posted by earboth

Hello,

the actual value of the truck can be calculated by:

where is the value after t years and is the initial value (price for the new truck).

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

Where did the 0.8 come from?

Originally Posted by GAdams

Where did the 0.8 come from?

Hello,

if something decreases by 20% then you have 80% left and 80% as a decimal is 0.8