Answer:
F = P(1 - x)^n
F = 10,000(1 - 0.1)^7
F = 10,000(0.9)^7
F = $4,783
The value of the tractor in 7 years is $4,783
Step-by-step explanation:
Applying the exponential depreciation equation;
F = P(1 - x)^n
Where;
F = final value after n years
P = initial value
x = depreciation rate (fraction)
n = time
Given;
P = $10,000
x = 10% = 0.10
n = 7 years
Substituting the given values;
F = 10,000(1 - 0.1)^7
F = 10,000(0.9)^7
F = 4782.969
F = $4,783
The value of the tractor in 7 years is $4,783
