A diminishing balance or reducing balance of my machine after 5 years it is calculated by using fixed personage on a discreasing values of the assets every year the following example will help us to understand this method using the following formula depreciation value at the end of the year DEPRECIATION
Methods to calculate depreciation the are two ✌️ ways to calculate depreciation
(1)fixed installment of traight line or original cost method
(2)diminishing balance or reducing balance _method
(A)fixed installment or streat line
The rasure of the different of the assets
By the expent life none as fixed installment (D)
Cost _Scrap value
Expented life in year
[D=C-Sv]
Where C=cost
Sv==scrap value
L=life span
How to calculate amount of assets after unknown years is given by
[A=cost _n×D]
By A=unknown year C=costs N=number of years ,D=depreciation
Example
If the ask you to calculate the annual installment of your machine or
see the amount of money this car will work ,and how it will lose it value after some amount of years by
car having a price of 5000,000at the end of 600,00 year .it Scrap value (Sv)life machine.(L)=30
What will be the depreciation amount
Cost }=5000,000_[D=C-Sv ]
L
D=5000.000 -60000=4940000÷30 =164666.667
$\164,667
5000,000-164,667=4,835,3331
My amount of machine that will depreciate after 30 years ,as a business person ,it will help you understand about your business investments expercially if you are doing business ,you need to
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