An item purchases for K55000 depreciates at a flat rate of 7% each year. Calculate the amount the item would depreciate each year.

Answer 1

To calculate the amount the item would depreciate each year, we need to multiply the initial cost of the item by the depreciation rate of 7%.

Depreciation amount = K55000 * 7% = K55000 * 0.07 = K3850

Therefore, the item would depreciate by K3850 each year.

Answer 2

Calculate the book value of the item after 8 years.
Use the formula:
Book Value after n years = P - n × (Pr)/100.
Where:
P is the purchased price.
n is the number of terms or years.
r is the rate.

Answer 3

Using the formula provided:

Book Value after 8 years = K55000 - 8 x (K55000 x 7)/100
Book Value after 8 years = K55000 - 8 x (K3850)
Book Value after 8 years = K55000 - K30800
Book Value after 8 years = K24200

Therefore, the book value of the item after 8 years would be K24200.

Answer 4

Calculate the scrap value of the item if it has a useful life of 13 years.
Use the formula:
Scrap value = P - n × (Pr)/100.
Where:
P is the purchased price.
n is the number of terms or years.
r is the rate

Answer 5

Given that the useful life of the item is 13 years, we can use the formula provided:

Scrap Value = K55000 - 13 x (K55000 x 7)/100
Scrap Value = K55000 - 13 x (K3850)
Scrap Value = K55000 - K50050
Scrap Value = K4950

Therefore, the scrap value of the item after 13 years would be K4950.