Question

An asset costing $5,000 has a salvage of $2,000 at the end of n years. If the depreciation for the 12th year is $100 using the sum-of-the-years-digits method, find n.

Answer 1

Let " n" the no. of years

Dep Under SUm of digits method for 12 th year = [ (n - 11) / [ n(n+1) / 2 ] * depreciable amount

100 = [ (n - 11) / [ n(n+1) / 2 ] * [ 5000 - 2000 ]

[ (n - 11) / [ n(n+1) / 2 ] = 100 / 3000

= 0.03333

The year at which % is 0.03333 for 12th year is the ans

If life time is 15 years, the % of dep for 12 th year is [ 15 -11 / (15*16/2) ]

= 4 / 120

= 0.0333 Thus 15 Years is correct.

n ( n +1 ) = 60n - 660

n² + n - 60n +660 = 0

n² - 59n - 660 = 0

if it is ax2+bx+c=0then x = [[ -b+/-SQRT[b2-4ac] ] / 2a

n =