Question

Eight years ago, Rudi thought that he was making a sound investment by buying $1000 worth of Pro Sports Management stock. Unfortunately, his investment depreciated steadily, losing 15% of its value each year. whats the multiplier and an equation for this

Answer 1

Answer:

The multiplier is 0.85

The depreciation equation is;

P = I(0.85)^t

Step-by-step explanation:

Let us write an equation for the depreciation

It is in the form;

P = I( 1 - r)^t

where P is the present value

I is the value at which it was bought

r is the depreciation percentage = 15% = 15/100 = 0.15

t is the number of years after byte year it was bought

so we can have;

P = 1000(1 - 0.15)^t

P = 1000(0.85)^t

The

multiplier is 0.85