document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1174241>Question 1174241</A>: <I><SPAN STYLE=\"word-break: break-all;\"> The purchase price for a company car is $19,800. The useful life is 6 years after which it will have an estimated scrap value of $1,200.<BR>\n" );
document.write( "-Find the linear equation relating book value and number of years.<BR>\n" );
document.write( "- What is the book value after four years? <BR>\n" );
document.write( "Show all work.  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #799641 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=799641\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> the price of the car is 19,800.<BR>\n" );
document.write( "that's the book value at the end of year 0.<BR>\n" );
document.write( "the end of year 0 is the beginning of year 1.<BR>\n" );
document.write( "the salvage value at the end of year 6 is 1,200.<BR>\n" );
document.write( "that's the book value at the end of year 6.\r<BR>\n" );
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document.write( "using straight line depreciation, the formula would be:<BR>\n" );
document.write( "y = mx + b<BR>\n" );
document.write( "m is the slope<BR>\n" );
document.write( "b is the y-intercept<BR>\n" );
document.write( "y is the value after x years.<BR>\n" );
document.write( "x is the number of years.\r<BR>\n" );
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document.write( "when x = 0, y = 19,800.<BR>\n" );
document.write( "when x = 6, y = 1,200\r<BR>\n" );
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document.write( "to find the slope, you need 2 points on the line.<BR>\n" );
document.write( "the first point is (x1,y1) = (0,19800)<BR>\n" );
document.write( "the second point is (x2,y2) = (6,1200)\r<BR>\n" );
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document.write( "the slope is (y2-y1)/(x2-x1) = (1200 - 19800)/(6-0) = -18600/6 = -3100<BR>\n" );
document.write( "the equation becomes y = -3100 * x + b<BR>\n" );
document.write( "replace x and y with one of the points to find b.<BR>\n" );
document.write( "i used (0,19800)<BR>\n" );
document.write( "y = -3100 * x + b becomes 19800 = -3100 * 0 + b<BR>\n" );
document.write( "solve for b to get:<BR>\n" );
document.write( "b = 19800.<BR>\n" );
document.write( "the equation becomes y = -3100 * x + 19800\r<BR>\n" );
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document.write( "when x = 0, the equation becomes y = -3100 * 0 + 19800.<BR>\n" );
document.write( "solve for y to get y = 19800.<BR>\n" );
document.write( "that's the book value at the end of year 0.\r<BR>\n" );
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document.write( "when x = 6, the equation becomes y = -3100 * 6 + 19800.<BR>\n" );
document.write( "solve for y to get y = 1200.<BR>\n" );
document.write( "that's the book value at the end of year 6.\r<BR>\n" );
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document.write( "when x = 4, the equation becomes y = -3100 * 4 + 19800.<BR>\n" );
document.write( "solve for y to get y = 7400.<BR>\n" );
document.write( "that's the book value at the end of year 4.<BR>\n" );
document.write( "that's your solution.\r<BR>\n" );
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