Find the value of a Mobile Phone after 2 years if it costs $1600 new and depreciates at 12% p.a.

To find the value of the mobile phone after 2 years, we can use the formula for depreciation:

\[
\text{Value after } n \text{ years} = \text{Initial Value} \times (1 - \text{Depreciation Rate})^n
\]

Here:
- Initial Value = $1600
- Depreciation Rate = 12% or 0.12
- $ n $ = 2 years

Now, plug in the values:

\[
\text{Value after 2 years} = 1600 \times (1 - 0.12)^2
\]

\[
\text{Value after 2 years} = 1600 \times (0.88)^2
\]

\[
\text{Value after 2 years} = 1600 \times 0.7744
\]

\[
\text{Value after 2 years} = 1239.04
\]

So, the value of the mobile phone after 2 years will be **$1239.04**.

Would you like more details or have any questions?

---

Here are 5 related questions to further explore this topic:
1. How would the value change if the depreciation rate was 15% per year?
2. What would be the value of the phone after 3 years at the same depreciation rate?
3. How does the depreciation formula differ for other types of depreciation, such as declining balance?
4. What if the phone appreciated instead of depreciating—how would the formula change?
5. How do you calculate the original price if you know the depreciated value and the depreciation rate?

**Tip:** Always check if the depreciation rate is compounded annually or if it's a simple depreciation to apply the correct formula.

Learn how to calculate the depreciation of a mobile phone valued at $1600 after 2 years, with a 12% annual depreciation rate. Follow a step-by-step solution using the depreciation formula. Suitable for high school students studying finance or mathematics.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation