Three years ago an appliance was valued at $2467 - HSC - SSCE Mathematics Standard - Question 4 - 2021 - Paper 1
Question 4
Three years ago an appliance was valued at $2467. Its value has depreciated by 15% each year, based on the declining-balance method.
What is its salvage value today... show full transcript
Worked Solution & Example Answer:Three years ago an appliance was valued at $2467 - HSC - SSCE Mathematics Standard - Question 4 - 2021 - Paper 1
Step 1
Calculate the first year's depreciation
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Answer
The appliance's initial value is $2467. After the first year, the value after a 15% depreciation can be calculated as follows:
Value after Year 1:
2467imes(1−0.15)=2467imes0.85=2096.95
Step 2
Calculate the second year's depreciation
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Answer
Now, taking the depreciated value from Year 1 as the new initial value, we calculate the second year's depreciation:
Value after Year 2:
2096.95imes(1−0.15)=2096.95imes0.85=1781.42
Step 3
Calculate the third year's depreciation
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Answer
Finally, for the third year, we use the value after Year 2:
Value after Year 3:
1781.42imes(1−0.15)=1781.42imes0.85=1514.20
Rounding this value to the nearest dollar gives us a salvage value of $1514.
Step 4
Final answer
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Answer
Thus, the salvage value today, rounded to the nearest dollar, is $1515.
