A computer is depreciated using a flat rate depreciation method. It was purchased for $2800 and depreciates at the rate of 8% per annum. The amount of depreciation after 4 years is
Question
A computer is depreciated using a flat rate depreciation method. It was purchased for $2800 and depreciates at the rate of 8% per annum. The amount of depreciation after 4 years is
Solution
To calculate the depreciation of the computer after 4 years using the flat rate depreciation method, follow these steps:
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Identify the initial cost of the computer, which is $2800.
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Identify the annual depreciation rate, which is 8% or 0.08 in decimal form.
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Calculate the annual depreciation amount by multiplying the initial cost by the depreciation rate. 224
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Calculate the total depreciation after 4 years by multiplying the annual depreciation amount by the number of years. 896
So, the amount of depreciation after 4 years is $896.
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