example 4
Depreciation
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
Chapter 8.3
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
Year
Value
0
900,000
1
870,000
2
840,000
3
810,000
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
Year
Value
0
900,000
1
870,000
2
840,000
3
810,000
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
Year
Value
0
900,000
1
870,000
2
840,000
3
810,000
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
Year
Value
0
900,000
1
870,000
2
840,000
3
810,000
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
Year
Value
0
900,000
1
870,000
2
840,000
3
810,000
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
Year
Value
0
900,000
1
870,000
2
840,000
3
810,000
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
an  a1   n  1 d
 870,000   n  1 30,000 
n
an
0
900,000
1
870,000
2
840,000
3
810,000
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
an  a1   n  1 d
 870,000   n  1 30,000 
n
an
0
900,000
1
870,000
2
840,000
3
810,000
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
an  a1   n  1 d
 870,000   n  1 30,000 
a3  870,000   3  1 30,000 
 810,000
n
an
0
900,000
1
870,000
2
840,000
3
810,000
a12  870,000  12  1 30,000 
 540,000
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
an  a1   n  1 d
 870,000   n  1 30,000 
a3  870,000   3  1 30,000 
 810,000
n
an
0
900,000
1
870,000
2
840,000
3
810,000
a12  870,000  12  1 30,000 
 540,000
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
an  a1   n  1 d
 870,000   n  1 30,000 
a3  870,000   3  1 30,000 
 810,000
n
an
0
900,000
1
870,000
2
840,000
3
810,000
a12  870,000  12  1 30,000 
 540,000
2009 PBLPathways
For tax purposes, a firm depreciates its $900,000 building over 30 years by the straightline method, which depreciates the value of the building by
900,000
 30,000 dollars
30
each year. What is the value of the building after 12 years?
an  a1   n  1 d
 870,000   n  1 30,000 
a3  870,000   3  1 30,000 
 810,000
n
an
0
900,000
1
870,000
2
840,000
3
810,000
a12  870,000  12  1 30,000 
 540,000
2009 PBLPathways