Question

From the following find out rate of depreciation.

Original cost of an asset 5,50,000

Useful life 10 years

Scrap value 50,000​

Answer 1

Answer:

Depreciation = Original cost - Scrap value / Useful life

= 550000 - 50000 / 10

=500000 / 10

=50000

Rate of Depreciation = 50000/550000*100

= 9.09%

Answer 2

Answer:

Rate of Depreciation = 9.1 %

Explanation:

Given :

Cost of an asset = 5,50,000

Estimated useful life of asset = 10 years

Scrap value = 50,000

To find :

Rate of Depreciation

Solution :

$\boxed{\sf{Annual\:Depreciation = {\dfrac{Cost \: of \: an \: asset \: - \: Scrap \: value }{Estimated \: useful \: life \: of \: asset}}}}$

$\longrightarrow\sf{\dfrac{5,50,000 - 50,000}{10}}$

$\longrightarrow\sf{50,000}$

Annual Depreciation = 50,000

★ Rate of Depreciation :

$\boxed{\sf{Rate\:of\:Depreciation = {\dfrac{Amount \: of \: depriciation}{Cost \: of \: an \: asset} \times 100}}}$

$\longrightarrow\sf{\dfrac{50,000}{5,50,000} \times 100}$

$\longrightarrow\sf{9.1 \: \%}$

∴ Rate of Depreciation = 9.1 %