Question

If a computer depreciates at a rate of 20% per year, what is the monthly depreciation rate?

6.67%


1.67%


8.19%


5.00%

Answer 1

1.67%

Explanation:

With the given information that the computer depreciates 20% a year, we have our basis for making the calculation. What is asked for is how much of a depreciation the computer has monthly. One year has 12 months, so in order to get to the result we just simply need to divided the 20% with the number of months in a year to get the result:

20 / 12 = 1.67

The result is 1.67%, thus the computer depreciates 1.67% on a monthly basis.