Question

You work at a company as an accountant. You are calculating the value of the company's assets after a 4% per year depreciation.

value of the assets was $204,500 and it has been 5 years since they were purchased, what is the value of these assets today?

Answer 1

The value of the company's assets after a 4% per year depreciation over 5 years, when the initial value was $204,500, is approximately $166,755.29.

Step-by-step explanation:

To calculate the value of the company's assets after a 4% per year depreciation over 5 years when the initial value of the assets was $204,500, we use the formula for straight-line depreciation: Asset Value = Original Value × (1 - Depreciation Rate)^Number of Years.

In this case, the original value is $204,500, the depreciation rate is 4% (or 0.04 as a decimal), and the number of years is 5.

Asset Value = $204,500 × (1 - 0.04)^5

Asset Value = $204,500 × (0.96)^5

Asset Value = $204,500 × 0.81537

Asset Value = $166,755.29 approximately

Therefore, the value of the assets today, after 5 years, would be approximately $166,755.29.