SOLUTION: Daniel's Print Shop purchased a new printer for $35,000. Each year it depreciates (loses value) at a rate of 5%. What will its approximate value be at the end of the fourth year

Algebra ->  Finance -> SOLUTION: Daniel's Print Shop purchased a new printer for $35,000. Each year it depreciates (loses value) at a rate of 5%. What will its approximate value be at the end of the fourth year      Log On


   

Question 136646: Daniel's Print Shop purchased a new printer for $35,000. Each year it depreciates (loses value) at a rate of 5%. What will its approximate value be at the end of the fourth year?
Answer by smartcookie(2) About Me  (Show Source):
You can put this solution on YOUR website!
The equation need to solve this problem is y=a(b)^x
a= the starting value
b= the rate of change
x= the time
to get the rate of change do the following:
add 1 to the percentage of change (only if value is growing)
subtract the percentage from one (only if value is decaying)
Since the printer is depreciating it is a decay.
The rate of change for this problem is showed below.
1-0.05
0.95 is the rate of change.
Below is the equation for the problem.
y=35000(0.95)^4 Work the problem.
Y=35000(0.814506250
Y=28507.71875 Since we are working with money we round to two decimal places.
The printer's value after four years is $28,507.72.