SOLUTION: Jasmine buys a computer for $1200. The computer depreciates at a rate of 40% a year, compounded monthly. How much is the computer worth in 18 months?
I know the formula for c
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I know the formula for c
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Question 583266: Jasmine buys a computer for $1200. The computer depreciates at a rate of 40% a year, compounded monthly. How much is the computer worth in 18 months?
I know the formula for compounded monthly is A=P(1+r/n)^n*t
so I tried A=1200(.6/12)^(12*1.5) but the answer I got was wrong.
Thanks Found 2 solutions by Alan3354, solver91311:Answer by Alan3354(69443) (Show Source):
You can put this solution on YOUR website! Jasmine buys a computer for $1200. The computer depreciates at a rate of 40% a year, compounded monthly. How much is the computer worth in 18 months?
I know the formula for compounded monthly is A=P(1+r/n)^n*t
so I tried A=1200(.6/12)^(12*1.5) but the answer I got was wrong.
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It's value decreases 40%/year = 40%/12 = 01%/3 = 0.1/3 per month.
Each month, it's worth (1 - 0.1/3 = 2.9/3) of the month before.
Worth = 1200*(2.9/3)^18
=~ $651.87
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The term "compounded monthly" doesn't fit here. The problem is not well stated. It should have said it depreciates 40/12% per month.
