Answer:
22.31%, 13.25%
Explanation:
Given:
Spencer estimates that his new car that costs $24,380 would be worth $13, 500 after two years
And would be worth $8,230 after five years.
Question asked:
What will be the annual rate of depreciation for the first two years ?
What will the percent be for the five years ?
Solution:
Cost of asset (new car) = $24,380
Scrap value of the car after two years = $13, 500
We have to find rate of depreciation for first two years.
So, useful life will be = 2 years
First of all we will find annual depreciation, then rate of depreciation.


Annual depreciation = 5440
Now,


Therefore, annual rate of depreciation for the first two years is 22.31%.
Similarly, we will find rate of depreciation for 5 years.
This time useful life, we will consider 5 years:
Scrap value = $8,230 after five years (given)


Annual depreciation = 3230


Therefore, annual rate of depreciation for the five years is 13.25%