Straight line depreciation refers to a decrease of an item’s book value by a fixed amount each time interval.
Total depreciation
Rate of depreciation
Cass purchased a $22,000 car four years ago. It has a current market value of $18,000. Assuming that Cass uses straight line depreciation, what is the rate that the car will depreciate by each year?
First, calculate how much the car has depreciated by now.
Total depreciation
Total depreciation
Total depreciation
We are told the car is four years old so divide the total depreciation by 4.
Rate of depreciation
Rate of depreciation
Rate of depreciation
The annual depreciation rate is $1,000 per year.
Simple Interest
Effective Interest Rate
Reducing Balance Depreciation
Unit Cost Depreciation
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