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GB-14-06-001 · Depreciation

A machine is worth £1480. Its value decreases by 6.2% each year. Work out its value after 4 years, to the nearest penny.

Compound Percentages (Depreciation) Booklet p. 52
Method
Use Original Amount × ((100 − %) / 100)^Time = New Amount
Worked Example (GB-14-06-001)
Booklet p. 51–52: Original Amount×(100±%100)Time=New Amount\mathbf{\text{Original Amount} \times \left(\frac{100 \pm \%}{100}\right)^{\text{Time}} = \text{New Amount}}
1) Use multiplier 0.9380.
2) 1480(0.9380)41480(0.9380)^4
3) £1145.71
£1145.71