Question

A company paid $140 comma 000 for a new 18-wheeler. When it is 9 years old it will be worth $50 comma 000. Using straight-line depreciation, the value of the truck in dollars, v, is a linear function of its age in years, n. Find the function and the value when the truck is 5 years old.

Answer 1

Residual value = 50,000

Depreciable value=140,000-50,000 =90,000

Annual depreciation= 90000/9 =10000

v= value of truck

n=age

v=cost - (annual dep. × n)

v=140,000 - (10,000×n)

this is the function.

value when age=5

v=140000-(10000×5)

v=140000-50000

v=$90000.