Depreciation Flashcards

A decrease in the value of an item over time, often calculated using percentages.

New value = Original value × (1 - Percentage decrease/100).

A method where the value decreases by a fixed percentage each year.

Value after n years = Initial value × (1 - Percentage decrease/100)^n.

The percentage by which an item's value decreases each year.

A process where a quantity decreases by the same proportion over equal time intervals.

Used to find the original value before depreciation: Original value = New value ÷ (1 - Percentage decrease/100).

If a car worth £20,000 depreciates by 10% per year, its value after 1 year is £20,000 × 0.9 = £18,000.

To calculate the value after multiple years, use the compound depreciation formula.

Growth involves an increase in value (1 + Percentage/100), while decay involves a decrease (1 - Percentage/100).