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Please help I don't understand because of this depreciation stuff. I want to know which one will be a better buy​

Please help I don't understand because of this depreciation stuff. I want to know-example-1

1 Answer

14 votes

So if i'm reading it right, it says the total depreciation will be 13% & 14% after the 5 years. If i'm misunderstanding, let me know and i'll fix my answer because the process will be a bit different

Depreciation means a decrease in something over time. You can think of it like a "__% off" sale if that helps

For the first option, we need to find 13% of 18,000. "Of" always means multiply, so 13%*18,000=2,340

Since we're decreasing, subtract 2,340 from the original cost

18,000-2,340=$15,660

Same process for the second option

14%*22,000=3,080

22,000-3,080=$18,920

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