SOLUTION: A computer that cost $37,000 has a life expectancy of % years. If it has depreciated to a value of $8000, how old is it?

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Question 160786: A computer that cost $37,000 has a life expectancy of % years. If it has depreciated to a value of $8000, how old is it?
Answer by Fombitz(32388) About Me  (Show Source):
You can put this solution on YOUR website!
I assume by % years you meant 5 years, so that in 5 years it depreciates to $0.
At time zero, the value is $37000.
At time 5 years (or 60 months), the value is $0.
What is the time, T, to reach a value of $8000.
Use straight line (linear) depreciation.
Set up a ratio.
%2837000-8000%29%2F%280-T%29=%2837000-0%29%2F%280-60%29
%2823000%29%2F%28-T%29=%2837000%29%2F%28-60%29
T=%2829%2A60%29%2F37
T=47.02
The computer is 47 months old.