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Linear depreciation question

  1. Sep 14, 2014 #1
    1. The problem statement, all variables and given/known data
    For tax and accounting purposes, corporations depreciate the value of equipment each year. One method used is called "linear depreciation," where the value decreases over time in a linear manner. Suppose that two years after purchase, an industrial milling machine is worth $830,000, and five years after purchase, the machine is worth $500,000. Find a formula for the machine value V (in thousands of dollars) at time t ≥ 0 after purchase.


    2. Relevant equations
    v=?


    3. The attempt at a solution
    This is what I got;

    At T=2 V=830,000
    At T=5 V=500,000

    V-500,000 =[T-5][500,000-800,000]/[5-2]
    C-500,000=[T-5][330,000]

    Is that right?
     
  2. jcsd
  3. Sep 14, 2014 #2

    HallsofIvy

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    Was that "C" in the last equation a typo?

    You have the right formula (point- slope which I assume was given in your book) but your arithmetic is terrible! (500,000- 800,000)/(5- 2) is NOT 330,000!
     
  4. Sep 14, 2014 #3
    Yes, it was a typo i meant to say "v".

    Sorry, I typed this late last night.

    V-500,000 =[T-5][500,000-830,000]/[5-2]
    V-500,000=[T-5][-330,000]
     
  5. Sep 14, 2014 #4

    HallsofIvy

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    Yes, so it is 830,000, not 800,000 and the fraction is negative. That is correct.
    (The fact that this is depreciation tells you that the slope is negative.)
     
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