A company that makes wildlife videos purchases camera equipment for $32,400. The equipment depreciates in value at a constant rate for 12 years, after which it is considered to have no monetary value. How much is the camera equipment worth 4 years after it is purchased?
Correct answer: C. $21,600
- A. $10,800
- B. $16,200
- C. $21,600
- D. $29,700
Explanation
Choice C is correct. The value of the camera equipment depreciates from its original purchase value at a constant rate for 12 years. So if x is the amount, in dollars, by which the value of the equipment depreciates each year, the value of the camera equipment, in dollars, t years after it is purchased would be 32,400 - xt. Since the value of the camera equipment after 12 years is $0, it follows that 32,400 - 12x = 0. To solve for x, rewrite the equation as 32,400 = 12x. Dividing both sides of the equation by 12 gives x = 2,700. It follows that the value of the camera equipment depreciates by $2,700 each year. Therefore, the value of the equipment after 4 years, represented by the expression 32,400 - 2,700(4), is $21,600.
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