The Internal Revenue Service has approved ten-year linear depreciation as one method for determining the value of business property. This means that the value declines to zero over a ten-year period, and you can claim a tax exemption in the amount of the value lost each year. Suppose a piece of business equipment costs $12,500 and is depreciated over a ten-year period. At right is a sketch of the linear function that represents this depreciation.

a. What is the y-intercept? Give the real-world meaning of this value.
b. What is the x-intercept? Give the real-world meaning of this value.
c. What is the slope? Give the real-world meaning of the slope.
d. Write an equation that describes the value of the equipment during the ten-year period.
e. When is the equipment worth $6500?

Transcribed Image Text:

A12.500 10,000 7.500 2.500 10 Time (yr) ine