Depreciation (1 Viewer)

[Bj189]

Can anyone help me plz. I need the formula for Depreciation or formulas.
Thank you.

 

[SoulSearcher]

The declining formula for depreciation:
S = P * (1 - r)ⁿ, where
P is the initial amount,
r is the rate in the time period
n is the amount of time period
S is the final value
Make sure that r and n are in the same time period, i.e. years, months, days etc.
Straight line depreciation is as follows:
S = V_o - Dn, where
S is value of asset after a number of time periods
V_o is the purcahse price of the asset
D is amount of depreciation per period
n is number of periods.

 

[PC]

Serious tip!

You'll probably see all sorts of fancy ways of dealing with depreciation questions. You might see tables or graphs or whatever, but when you're doing a depreciation question, just stick to using the formulas and you'll be right. Easy marks!

Remember:

Straight Line Method
Value goes down by a set amount per year.
Use: S = V₀ – Dn

Declining Balance Method
Value goes down by a set rate per year.
Use: S = V₀(1 – r)ⁿ

JUST USE THE FORMULA!

Hope this helps!