Suppose you buy a piece of office equipment for USD 10,000. After 3 years you sell it for a scrap value of USD 3,000. The equipment is depreciated linearly over 3 years. The rate of depreciation of the piece of equipment is
USD 7,000.00 per year

USD 2,333.33 per year

USD 1,750.00 per year

USD 3,500.00 per year

USD 3,333.33 per year

To determine the rate of depreciation per year for the office equipment, we can use the following formula for linear depreciation:

\[
\text{Depreciation per year} = \frac{\text{Initial cost} - \text{Scrap value}}{\text{Number of years}}
\]

Given:
- Initial cost = USD 10,000
- Scrap value = USD 3,000
- Number of years = 3

Plugging in the values:

\[
\text{Depreciation per year} = \frac{10,000 - 3,000}{3} = \frac{7,000}{3} \approx 2,333.33 \text{ USD per year}
\]

Therefore, the correct answer is **USD 2,333.33 per year**.

Would you like further details or have any questions?

Here are 5 related questions for further exploration:
1. What would be the depreciation rate if the equipment had a useful life of 5 years instead of 3 years?
2. How would the depreciation rate change if the scrap value was USD 2,000 instead of USD 3,000?
3. What is the book value of the equipment at the end of the second year?
4. How does linear depreciation compare to declining balance depreciation?
5. How do you calculate the accumulated depreciation over a period?

**Tip:** When calculating depreciation, always ensure you subtract the scrap value before dividing by the number of years.

Suppose you buy a piece of office equipment for USD 10,000. After 3 years you sell it for a scrap value of USD 3,000. The equipment is depreciated linearly over 3 years. The rate of depreciation of the piece of equipment is USD 7,000.00 per year, USD 2,333.33 per year, USD 1,750.00 per year, USD 3,500.00 per year, or USD 3,333.33 per year.

Learn how to calculate the linear depreciation rate for office equipment purchased at USD 10,000 and sold for a scrap value of USD 3,000 after 3 years. Using the linear depreciation formula, the rate of depreciation is USD 2,333.33 per year. This problem is ideal for students in Grades 9-11 studying arithmetic and depreciation concepts.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation