Question

Maria bought a laptop computer for $850. The value of the computer depreciates about 25% each year. After 3 years, she decides to sell it to her younger brother. What is a fair price for the computer?

Answer 1

Using the depreciation formula:

start value x percent of value^time

850 x 0.75^3 = $358.59

answer: $358.59

Answer 2

Answer: $358.59

Step-by-step explanation:

$After one year the laptop computer's price is: \begin{aligned}&=\ 850-\ 850 \times 25 \% \\&=\ 850-\ 212.5 \\&=\ 637.5\end{aligned}$

$Again two year the computer's price is: \begin{aligned}&=637.5-25 \% \text { of } 637.5 \\&=637.5-159.375 \\&=\ 478.125\end{aligned}$

$\bold{\text { So a fair price for the computer is } \ 358.59}$

$\begin{aligned}\\\bold{Or}\text { Simply Calculate as } &=(\text { Purchase price }) \times(1-25 \%)^\text{time} \\&=850 \times(1-0.25)^{3} \\&=850 \times(0.75)^{3} \\\bold{&=\ 358.59}\end{aligned}$