15-9-2

Depreciation

IExample 1

Use the sum-of-the-years’-digits method ([SYD]) to calculate the first year (j = 1) of depreciation on an $12,000 (PV) computer, with a useful life (N) of five years. Use a depreciation ratio (I%) of 25%, and assume that the computer can be depreciated for a full 12 months in the first year (YR1).

Tip

• At the end of the useful life the value of the computer will be 0, so we enter 0 in the FV field.

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