1. Note 4: Depreciation
Depreciation occurs over time as the value of a commodity or object decreases. Example, the value of a new car.
Diminishing Value Depreciation
The value of the article reduces each year by the same percentage of the previous year’s value
A = value after n time periods
C = original purchase price
r = depreciation rate (negative)
n = number of time periods

2. Example: A car is bought for $40 000
Example: A car is bought for $ Find its value after 4 years if it depreciates 30% each year diminishing value method
C = $40,000
r = 30
n = 4
Value = $9604
N = 4
I% = -30
PV =
PMT = 0
FV =
P/Y = 1
C/Y = 1
Graphics Calculator
Compound Interest
NB: Interest is negative

3. Page 479
Exercise 15D