Question

If the roof a property cost $14,000 and its economic life is 18 years, what would its value be after four years using a straight-line method of depreciation?

Answer 1

Given:
 Cost of the roof of a property = $14,000
 Economic life = 18 years
   To find: value after 4 years using straight-line depreciation method. Solution:
  Loss of value per year = cost of roof of property / economic life of property

14000/18 = $777.78
   Every year, value of property is getting depreciated by $777.78.
   So, value after four years is calculated below:

   Value after 1 year = $(14000 - 777.78) = $13222.22
 Value after 2 year = $(13222.22 - 777.78) = $12444.44
 Value after 3 year = $(12444.44 - 777.78) = $11666.66
 Value after 4 year = $(11666.66 - 777.78) = $10888.88
   Value after four years = $10888.88