1. Press Ctrl-A ©G Dear 2009 – Not to be sold/Free to use Depreciation Stage 5 - Year 10

2. 2 Depreciation What is depreciation? It is the reduction in value of an item over time. A Subaru Tribeca Costs $58990 It depreciates by 20% annually for 4 years End of Slide

3. 3 Depreciation – First Principles depreciated value$58 990 20%p.a.3 years What is the depreciated value of $58 990 at 20% p.a. for 3 years? PrincipalYear 1 Principal Year 1 = $58 990 Interest Year 10.20 Interest Year 1 = 0.20 x $58 990= $11 798.00 Principal Year 2 Principal Year 2 = $58 990 - $1 1798= $ 47192.00 Interest Year 20.20 Interest Year 2 = 0.20 x $47192 = $ 9438.40 Principal Year 3 Principal Year 3 = $ 47192 - $9438.40= $37753.60 Interest Year 30.20 Interest Year 3 = 0.20 x $37753.60 = $ 7550.72 Depreciated Value Depreciated Value = $37753.60 - $7550.72 $30202.88 = $30202.88 Initial End of Slide

4. 4 Compound Interest Formula Depreciated value $5899020%p.a.3 years What is the Depreciated value of $58990 at 20% p.a. for 3 years? P = $ 58 990 n = 3 years r = 0.20 D = P(1 - r) n = 58 990(1 - 0.20) 3 = 58 990 x 0.80 3 = $30202.88 End of Slide

5. 5 Compound Interest Formula Depreciation amount What is the Depreciation amount of $58990.00 and depreciated value of $30202.88 over 3 years? Amount of Depreciation = $58 990.00 - $30 202.88 = $28 787.12 End of Show