I can understand in my head how to solve it I can't figure it out on paper. Help......I'm sure this will be easy for someone.
The Rental Depreciation Problem. The owner of a rental house can depreciate its value over a period of
years, meaning that the value of the house declines at an even rate over that period of time until the value
is $0.
a. By what fraction does the value of the house depreciate
the first year?
b. If the house is judged to be worth $85,000, what is
the value of the first year’s depreciation
What period of time is used in this rental depreciation?
27 1/2 YEARS
Can anyone point me in the right direction for this equation?
To solve this problem, we need to understand the concept of depreciation and use some basic mathematical calculations.
a. To find the fraction by which the value of the house depreciates in the first year, we need to know the total period of depreciation. Let's assume the total period is n years.
Depreciation is the rate at which the value declines over time. In this case, the rate of depreciation is even throughout the n years. So, if we divide 1 by n, we will get the fraction by which the value depreciates each year.
For example, if the total period of depreciation is 10 years, then the fraction by which the value depreciates each year is 1/10.
b. Now let's calculate the value of the first year's depreciation when the house is worth $85,000. Since the rate of depreciation is even throughout the period, we can calculate the value of the first year's depreciation as follows:
First, calculate the fraction of depreciation for the first year using the formula from part a. Let's denote this fraction as f.
The value of the first year's depreciation can be found by multiplying the initial value of the house ($85,000) by the fraction of depreciation for the first year (f).
For example, if the fraction of depreciation for the first year is 1/10, then the value of the first year's depreciation would be $85,000 * 1/10 = $8,500.
To sum up:
a. The fraction by which the value of the house depreciates in the first year can be calculated by dividing 1 by the total period of depreciation (n).
b. The value of the first year's depreciation can be calculated by multiplying the initial value of the house by the fraction of depreciation for the first year.