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March 26, 2017

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Brad bought $5,141 worth of office equipment. The government allows for office equipment to be depreciated at an annual rate of 5.5% per year. How long will it take for Brad to depreciate the equipment fifty-four percent?

  • math - ,

    100 - 5.5 = 94.5 so
    present value = original value * .945^n

    100 - 54 = 46
    so final value = original value * .46
    so
    original value *.46 = original value * .945^n

    or
    .945^n = .46
    n log .945 = log .46
    n = log.46/log.945 = 13.7 years

  • math - ,

    My answer assumes depreciation per year is based on current depreciated value. If instead it is "straight line" or a constant amount per year then
    .055 * original value = amount per year
    .055 n = .54
    n = 9.82
    You problem does not specify which type of depreciation is intended.

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