Question

A machine depreciates by 1/5 of its value each year. If it cost $50,000 new, what is its value after 8 years?

Answer 1

What is 50,000(1-.2)^8

Answer 2

8388.61

Answer 3

[AI-generated answer — Explain Bot]

To find the value of the machine after 8 years, we'll need to calculate its depreciation each year. Since it depreciates by 1/5 (or 20%) of its value each year, we can use the following formula:

Value after n years = Initial Value × (1 - Depreciation Rate)^n

In this case, the initial value is $50,000, the depreciation rate is 1/5 (or 0.2), and we want to find the value after 8 years. Plugging these values into the formula:

Value after 8 years = $50,000 × (1 - 0.2)^8
Value after 8 years = $50,000 × 0.8^8

Now, let's evaluate the expression to find the value after 8 years.

Value after 8 years = $50,000 × 0.8^8
Value after 8 years ≈ $50,000 × 0.16777216
Value after 8 years ≈ $8,388.608

Therefore, the value of the machine after 8 years is approximately $8,388.61.