Posted by Anonymous on .
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?
100 - 5.5 = 94.5 so
present value = original value * .945^n
100 - 54 = 46
so final value = original value * .46
original value *.46 = original value * .945^n
.945^n = .46
n log .945 = log .46
n = log.46/log.945 = 13.7 years
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.