Question

Karen purchased a used vehicle that depreciates under a straight line method the initial value if the car is 4400 and the salvage value is 800 if the car is expected to have a useful life of another six years how much will it depreciate each year?

Answer 1

Karen expects the vehicle to depreciate by 600 each year.

Explanation:

Given:

- initial value: 4400

- salvage value: 800

- another six years

It is expected to depreciate from 4400 to 800 in 6 years.

The depreciation per year is the ratio

depreciation per year = (total depreciation) / (number of years)

Total depreciation is the change in value, so the depreciation per year is

(4400 - 800)/6 = 600