Amachine costing rs.80,000 would reduce to rs.20,000 in 8 years. find the rate of yearly depreciation, given that the depreciation is calculated using diminishing balances method.

rate of yearly depreciation is 15.91 %

Step-by-step explanation:

given data

machine cost = Rs 80000

reduce = Rs 20000

time t = 8 year

to find out

rate of yearly depreciation

solution

we will apply here rate of yearly depreciation formula that is

rate of yearly depreciation = 1 - × 100     ..............1

put here all these value we get rate of yearly depreciation

rate of yearly depreciation = 1 - × 100

rate of yearly depreciation = 1 - × 100

rate of yearly depreciation = 15.91 %

so rate of yearly depreciation is 15.91 %