# SOLUTION: This is an open ended question but I am not sure how to even start this. The effect of depreciation can be computed using a formula similar to the formula for compound interest.

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 Question 187673: This is an open ended question but I am not sure how to even start this. The effect of depreciation can be computed using a formula similar to the formula for compound interest. A) assume depreciation is the same each mont. Write a problem involving depreciation and solve it. B) Develop a general formula for depreciation defining what each variable in the formula stands for.Answer by stanbon(57214)   (Show Source): You can put this solution on YOUR website!The effect of depreciation can be computed using a formula similar to the formula for compound interest. ---------------------------------------- Appreciation: A(t) = P(1+(r/n))^((nt) --- A) assume depreciation is the same each month. Write a problem involving depreciation and solve it. ---------------------------------- A person inherits 10,000 and decides to spend 6% each quarter of the year. How much will be left in 5 years? Depreciation: A(t) = P(1-(r/n))^(nt) A(5) = 10,000(1-(0.06/4))^(4*5) A(5) = 10,000(1-0.0150)^20 A(5) = 10,000(0.9850)^20 A(5) = 10,000*0.7391 A(5) = \$7391.00 ================================= B) Develop a general formula for depreciation defining what each variable in the formula stands for. Comment: I'll leave that to you. ====================================== Cheers, Stan H.