a printer is purchased for $1,600 and has a resale value of $300 after a useful life of 5 years. using a…
a printer is purchased for $1,600 and has a resale value of $300 after a useful life of 5 years. using a book value depreciation chart, calculate the number of years until the book value of the printer is $820. ? years
Answer
Explanation:
Step1: Calculate annual depreciation
The initial cost $C = 1600$, the salvage value $S=300$, and the useful - life $n = 5$ years. The annual depreciation $D$ is calculated using the straight - line depreciation formula $D=\frac{C - S}{n}$. $D=\frac{1600 - 300}{5}=\frac{1300}{5}=260$.
Step2: Set up an equation for book value
The book value $BV$ at year $t$ is given by the formula $BV = C−Dt$. We know that $BV = 820$, $C = 1600$, and $D = 260$. Substitute these values into the formula: $820=1600−260t$.
Step3: Solve the equation for $t$
First, rearrange the equation: $260t=1600 - 820$. $260t = 780$. Then, divide both sides by 260: $t=\frac{780}{260}=3$.
Answer:
3