# Reducing balance method

A company buys an item having a useful life of 10 years for 1,000,000. If the company depreciates the item by the reducing balance method,
a. Determine the depreciation for the first year.
b. Estimate the depreciation for the second and third years.
c. What is the salvage value of the asset?

Result

a =  100000
b2 =  90000
b3 =  81000
c =  348678.44

#### Solution:

$t=10 \ \text{y} \ \\ x=1000000 \ \\ \ \\ q=1/t=1/10=\dfrac{ 1 }{ 10 }=0.1 \ \\ a=x \cdot \ q=1000000 \cdot \ 0.1=100000=1.000000\cdot 10^{ 5 }$
$b_{2}=q \cdot \ (x - a)=0.1 \cdot \ (1000000 - 100000)=90000$
$b_{3}=q \cdot \ (x - a-b_{2})=0.1 \cdot \ (1000000 - 100000-90000)=81000$
$k_{10}=(1-q)^{10}=(1-0.1)^{10} \doteq 0.3487 \ \\ c=k_{10} \cdot \ x=0.3487 \cdot \ 1000000=348678.4401=348678.44$

Our examples were largely sent or created by pupils and students themselves. Therefore, we would be pleased if you could send us any errors you found, spelling mistakes, or rephasing the example. Thank you!

Leave us a comment of this math problem and its solution (i.e. if it is still somewhat unclear...):

Be the first to comment!

Tips to related online calculators
Do you want to convert time units like minutes to seconds?

## Next similar math problems:

1. Money duo
Julius and Mark have together 45 euros. Mark has 50% more money than Julius. Determine the amount of money that have Mark and Julius.
2. Monica
Monica left Php.900 to Bianca. When monica asked for it after 6 months, Bianca decided to give Php.945 instead because she was able to use the money. What interest rate on Monica's money was used by bianca?
3. Loan 4
Mr santos borrowed Php.18,000 at 1.5% interest for one year. What was the total amount he paid for the end of the 1-year term?
4. Principal and interest
Peter put € 270 principal into bank and at the end of the year on account was € 282. To what annual interest rate that Peter had deposited money in the bank?
5. Fix + percentages
Mrs. Vargas is a car sales agent who earns Php.5,850 monthly plus a 4% commision on all her sales. During a month, she sold a car worth Php.740,000. How much is her total earnings?
6. Price inflation
This year the average wage grew by 4.5%. Prices rose by 2%. How much did the real wage increase in the given year?
7. Penalty daily
John was to pay CZK 1,500. If he does not pay on time, he will be charged a penalty of 0.5 per mille of the amount owed for each day of delay. He will remember in 30 days. How much is the penalty?
8. Deposit is pesos
Sally deposits Php.22,000 in her savings account. If the bank pays 1.5% interest per year, how much will she receive at the end of the year?
9. 15 teachers
15 teachers teach for a combined amount of 128 days over a period of 64 days. What is this expressed as a percentage?
10. School yearbook
Bianca sold Php.18,500 worth of advertisements for the school yearbook. If she is given a commision of 8%, how much did she earn for the advertisements?
11. Spending
If spends 25% of my net pay of $922.28 on entertainment. How much money is that? 12. Ages 2 A man's age is 4 times his son's age. After 5 years he will be just twice his son's age, find their ages. 13. Savings and retirement The older sibling has saved 44% more euros than the youngest, which represents 22 euros. How many euros older brother has saved ? 14. Tour 35 people went on a tour and paid 8530, -. Employees pay 165, and family members 310. How many employees and how many family members went to the tour? 15. Commission Daniel works at a nearby electronics store. He makes a commission of 15%, percent on everything he sells. If he sells a laptop for 293.00$ how much money does Daniel make in commission?