Question

On federal income tax returns, self-employed people can depreciate the value of business equipment. Suppose a computer valued at $2,150 depreciates at a rate of 40% per year. How many years will it take for the computer's value to be less than $325. Enter the number of years as a whole number.

Answer 1

325=2150(1-0.40)^t
Solve for t
325/2150=(1-0.40)^t
Log(325/2150)=t*log(1-0.40)
t=log(325÷2,150)÷log(1−0.40)
t=3.69=4 years