Question

If you bought your car 5 years ago for $15,000 and today you can sell for $7000, what was it's rate of depreciation? Round to two decimal places (remember your answer will be a %)

Answer 1

Answer : The rate of depreciation is, $16000

Step-by-step explanation :

Formula used to calculate the rate of depreciation is:

$\text{Depreciation rate}=\frac{\text{Purchase price of asset }+\text{ Salvage value}}{\text{Estimate life of asset}}$

Given:

Purchase price of asset = $15000

Salvage value = $7000

Estimate life asset = 3 years

Now put all the given values in the above formula, we get:

$\text{Depreciation rate}=\frac{15000+7000}{5}$

Deprecation rate = $16000

Therefore, the rate of depreciation is, $16000