SOLUTION: After 4 years a tractor purchased for E58 500 has a resale value of E35 080. Find its annual rate of depreciation.

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Question 1005213: After 4 years a tractor purchased for E58 500 has a resale value of E35 080. Find its annual rate of
depreciation.

Answer by fractalier(6550) About Me  (Show Source):
You can put this solution on YOUR website!
We use r for the rate of depreciation, such that (I am assuming that the depreciation is compounded...if not, 15% per year is the answer)
35080 = 58500*(1-r)^4
Solve for r...
(1-r)^4 = .6
1-r = .6^(.25)
1-r = .88
r = .12 = 12%