SOLUTION: An asset has it original value of 120, 000 pesos has a salvage value of 3% of its original value in 12 years. What is the asset’s value after 8 years of use? Use straight line de

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Question 1187666: An asset has it original value of 120, 000 pesos has a salvage value of 3% of its original value in 12 years. What is the asset’s value after 8 years of use? Use straight line depreciation method.
Found 2 solutions by ikleyn, josgarithmetic:
Answer by ikleyn(52754)   (Show Source): You can put this solution on YOUR website!
.

The asset was 120,000 pesos at the beginning and 3% of it, i.e. 0.03*120000 = 3600 pesos after 12 years.


The yearly depreciation rate is then   = 9700  pesos per year  (using linear model).


In 8 years, the asset lost 8*9700 = 77600 pesos.


Hence, after 8 years, the value of the asset was  120,000 - 77,600 = 42400 pesos. ANSWER

Solved.

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It could be solved using the linear approximation  (interpolation)  formula,
but I prefer to give the solution in meaningful terms  (instead of giving the formal presentation).


Happy learning  ( ! )



Answer by josgarithmetic(39613)   (Show Source): You can put this solution on YOUR website!
Like a linear equation to include two points on the line.
(0,120000) and (12,(0.03)*120000)
Or the two points (0,120000) and (12,3600).

You want to know the point (8,?).
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