A company buys a machine for $275,000 that depreciates at a rate of 10% per year. Find a formula for the value of the machine after n years. What is its value after 5 years?

The formula is;

V = 275,000(0.9)^n

The value of the machine after 5 years is $162,384.75

Step-by-step explanation:

Here, we want to find the formula for the value of the machine after n years

Mathematically, we can use an exponential model for this

V = I ( 1 - r)^n

Where v is the value after n years

I is the value at which the machine was bought

r is the depreciation percentage ; 10% = 10/100 = 0.1

n is the number of years

Thus;

V = 275,000(1 - 0.1)^n

V = 275,000(0.9)^n

The value of the machine after 5 years will be;

V = 275,000(0.9)^5

V = 162,384.75

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