Dr. J's Maths.com
Where the techniques of Maths
are explained in simple terms.

Financial maths - Straight line depreciation.
Test Yourself 1 - Solutions.


 

Future value. 1.The value of a car purchased for $28,000:

(i) after one year is:
$28,000 - $1,150 = $26,850.

(ii) after 5 years is:
$28,000 - 5 × $1,150 = $22,250.
 

2. The book value of the photocopier is

$5,400 - 4 × $725 = $2,500.
  3. The combined value of the five lawnmowers after
4 years is:

5 × ($849 - $210×5) = $45.
Present value. 4. Original purchase price:

$220 + 5 × $105 = $745.
  5. The cost of the car 6 years ago was:

$2,670 + 6 × $1,245 = $10,140
  6. The original price of the machine was:

$425,000 + 3 × $78,000 = $659,000
Rate of depreciation. 7. Rate of depreciation = $125,000 - $100,000
= $25,000 p.a.
  8. 6,000 = 10000 - r × 5

5r = $4,000

r = $800 p.a.
  9. $22,287 = $58,650 - 2r

2r = $36,363

r = $18181.50 p.a.
Number of periods. 10. 27,000 = 69,000 - 7,000 × n

7,000 n = 42,000

n = 6 years.
  11. 7 = 14 - 1.4n

1.4n = 7

n = 5 secs.

 

12. 46.8 = 82.0 - 3.2n

3.2n = 35.2

n = 11 hours