Hi,

I know we just need to 8000 * 0.4 considering the 30% decrease per year, but I just wonder what is the case that we need to multiply 0.7 each year instead,,,,that is (8000*0.7)*0.7....


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

Simple

(Remember the machine decreases by 30% of its "original purchase price" each year.)

Thanks Ajith for the explanation!

So, the difference is the decrease during the period and at the end of (as a result of) the period... I guess?

If the quesion above were "what was its market value at the end of 1984" instead of saying "what was its market value two years later", we should use 8000*0.07*0.07 instead?

Thanks again for your help!