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Lesson 3, Topic 4
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# Depreciation

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Items such as cars and electrical equipment lose value as time passes. This loss in value is called depreciation. Depreciation is usually given as a percentage of the value of the item at the beginning of the year.

Example:

A television costing #16000 depreciates by 25% in the first year and 20% in the second year. Find its value after two years.

Solution

1st year: $$\frac{25}{100} \scriptsize \; \times \; 16000$$

= #4000

Value = 16000 – 4000

=12000

2nd year: $$\frac{20}{100} \scriptsize \; \times \; 16000$$

= #2400

Value= 12000 – 2400

= #9600.

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