RatedrillDouble-declining depreciation
A time value of money problem from Ratedrill. Solve it with one answer box, with fresh numbers on every attempt and the formula, calculator keystrokes and Excel version in the worked answer, and it is checked the moment you submit.
The task
A delivery van costs $13,000, with a salvage value of $1,000 and a 10-year life. Using double-declining balance (no switch to straight line), what is the depreciation expense in year 3?
What this problem teaches
Rate = 2 / life. Each year, depreciation = rate × book value at the start of the year, never taking book value below salvage.
A hint if you get stuck
Rate = 2 / life. Each year, depreciation = rate × book value at the start of the year, never taking book value below salvage.
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