Appreciation and Deappreciation

LauraRocks

New member
Joined
Feb 3, 2008
Messages
2
I'm having trouble understanding how you would find an equation for any appreciation or deappreciation problems. One of mine is:

A business purchased the computer shown. It will be depreciated over a 5-year period, when it will probably be worth $160. Find the depreciation equation.

The overall cost of the computer is $2350.
 

jwpaine

Full Member
Joined
Mar 10, 2007
Messages
723
Simple linear equation of the form y = mx + b

First, find the rate of change by which the price of the computer decreases in value for every year.

Your line will have the two points (0, 2350) , (5, 160)

Use the equation for slope = m = (y2 - y1) / (x2 - x1) = (160 - 2350) / (5 - 0) = -(2190) / (5)

We know that b = initial price of purchase. Plug the values of m and b back into your slope-intercept form, and you have an equation that models the deprecation.
 
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