Test 7 Section 3: #6

The key to getting this one is the phrase “at a constant rate.” The question gives us the original value of the equipment, $32,400, and tells us it loses value *at a constant rate* so that it’s worthless after 12 years.

The constant rate means it loses the same amount of value every year. Which means it loses per year.

So, four years from its purchase date, the equipment will be worth .

Another way to go is to recognize that 4 is 1/3 of 12, so after 4 years, the equipment would have lost 1/3 of its value, *i.e.*, it would be worth 2/3 of its original value.