Answer to Question #241757 in Financial Math for Shaz

Question

Five years ago, Michaela bought a new computer. The current value of the computer is exactly half of the purchase price. If the value deprecated by a fixed annual rate, according to the reducing-balance method, calculate the rate of depreciation.

Answer 1

Let the purchase price value be x

Current value be 1/2x

So we use the reducing balance method to solve

Where we deduct the accumulated (total) depreciation from the cost of the fixes asset

Formula is; cist of the fixed asset $-$ total depreciation

Let the value of the fixes cost to be y

$(y-1/2x)$