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Examine the straight line depreciation

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Reference no: EM131566710

Question: For most assets such as cars, stereo equipment, and furniture, the value decreases, or depreciates, each year. If the value of an asset is assumed to decrease by a fixed percentage of the original value each year, it is referred to as straight line depreciation.

(a) Suppose the value of a car which initially costs $20 000 depreciates by 10% of its original value each year. Find a formula for its value P (t) after t years.

(b) If a $500 washing machine is completely depreciated after 10 years (straight line depreciation), find a formula for its value W (t) after t years.

Reference no: EM131566710

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