A computer was purchased in 1999 for $3000. Its value in current dollars depreciates steadily at a rate of 25% per year. What will the computer's value be at the beginning of 2003?
A) $1920.05
B) $949.22
C) $652.28
D) $373.81

Question

Quizplus · Accepted Answer

To find the value of the computer at the beginning of 2003, we need to apply the depreciation rate of 25% per year for the years 1999 to 2002 (4 years). 
So, the value of the computer at the beginning of 2003 can be found as: 
$3000 * (1-0.25)^4 = $949.22 
Therefore, the answer is choice B.

A Computer Was Purchased in 1999 for $3000