Solve the Problem $\$ 4700$ Its Value Each Year Is About

question 64

Multiple Choice

Solve the problem.
-A computer is purchased for $\$ 4700$ . Its value each year is about $78 \%$ of the value the preceding year. Its value, in dollars, after $t$ years is given by the exponential function $\mathrm { V } ( \mathrm { t } ) = 4700 ( 0.78 ) ^ { \mathrm { t } }$ . Find the value of the computer after 7 years.

• A) \(\$ 643.95\)
• B) \(\$ 502.28\)
• C) \(\$ 825.58\)
• D) \(\$ 25,662.00\)

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Definitions:

Mean-Standard Deviation Graph

A graphical representation used in finance to show the risk (standard deviation) and return (mean) of different investments.

Utility Function

A mathematical representation of a decision-maker's preference ranking for a set of outcomes or goods, reflecting their attitude towards risk.

Expected Utility

The anticipated value derived from an uncertain outcome, where utility represents a measure of relative satisfaction or benefit.

Indifference Curves

Graphical representations in microeconomics showing different bundles of goods between which a consumer is indifferent.