reducing balance method

dwkaye
Registered Posts: 1 New contributor 🐸
hi
does anybody know of a formular to find out the reducing balance percentage when only given the amount and number of years particually odd years, say £1,000 over 5 years. the answer is 50% but i would like to know how they got to that
regards dean
does anybody know of a formular to find out the reducing balance percentage when only given the amount and number of years particually odd years, say £1,000 over 5 years. the answer is 50% but i would like to know how they got to that
regards dean
0
Comments
-
If you mean that 5 years depreciation was worth 50% of the value of the asset and that was £1,000.
Then- Take the 1000 of residual value at the end of the 5 years
- Divide by the 2000 original value
- To get your 50%
- Find the 5th root of this .......... 0.870551
- 1 minus this figure gives you the annual rate 12.945%
1-((Original cost/Residual value)^(1/life))0 -
God, you are good.......0
-
Crikey Sandy thats clever:001_smile:0
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