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 $820,000, and five years after purchase, the machine is worth $430,000. Find a formula for the machine value V.

Respuesta :

Answer:

[tex]V=-130000x+1080000[/tex]

Explanation:

Linear Dependence

Some variables are known or assumed to have linear dependence which means the graph of the ordered pairs (x,V) is a straight line.

If we know two points of the line, we can come up with the exact equation and therefore make predictions for other values of x

The linear depreciation gives us these points (2,820000) and (5,430000)

The general equation of the line is

[tex]V=mx+b[/tex]

Where V is the machine value and x is the  number of years after purchase. We need to find the values of m and b.

Replacing the first point

[tex]820000=m(2)+b[/tex]

[tex]2m+b=820000[/tex]

Replacing the second point

[tex]5m+b=430000[/tex]

Subtracting them  

[tex]-3m=390000[/tex]

[tex]m=-130000[/tex]

Replacing in any of the equations, say, the first one

[tex]2(-130000)+b=820000[/tex]

Solving for b

[tex]b=820000+260000[/tex]

[tex]b=1080000[/tex]

The formula for the machine value V is  

[tex]\boxed{V=-130000x+1080000}[/tex]

Formula for the machine value V in x year is v = -130000(x) + 1,080,000

Liner depreciation based problem:

What information do we have?

Cost of machine after 2 year = $820,000

Cost of machine after 5 year = $430,000

Liner depreciation equation

v = mx + b

After 2 year

820,000 = m(2) + b

820,000 = 2m + b .........   Eq1

After 5 year

430,000 = m(5) + b

430,000 = 5m + b .........   Eq2

Eq2 - Eq1

3m = -390,000

m = -130,000

From Eq

430,000 = 5m + b

430,000 = 5(-130,000) + b

b = 1,080,000

Liner equation of tha cost.

Amount of machine = mx + b

Amount of machine = -130000(x) + 1,080,000

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