analytics

Section2 Q1

1. The market value of a certain machine decreased by 30 percent of its purchase price each year. If the machine was purchased in 1982 for its market value of $8,000, what was its market value two years later?
(A) $8,000
(B) $5,600
(C) $3,200
(D) $2,400
(E) $800


Answer: C

Highlight 'Answer:' with your mouse, to see the answer choice.

Put your answers in comments section.

4 comments:

  1. Solution:

    Price decreased every year = 30% of $8000 = $2400

    Price after 2 years = $8000 - $2400 * 2 = $3200

    ReplyDelete
  2. I dont think this solution is correct.

    1st year reduction = $8000 * 0.3 = $2400
    Market price = $8000 - $2400 = $5600

    2nd year reduction = $5600 * 0.3 = $1680
    Market price = $5600 - $1680 = $3920.

    The same result can be obtained as follows as well:
    Resultant market price = $8000 * 0.7 * 0.7

    ReplyDelete
  3. We are talking about reduction with respect to market price i.e. $8000. So every year reduction would be $2400.

    ReplyDelete
  4. The market value of a certain machine decreased by 30 percent of its purchase price each year.
    This is an ambiguous statement.

    ReplyDelete