Maths Quest Maths A Year 12 for Queensland Chapter 2 Appreciation and depreciation WorkSHEET 2.21
WorkSHEET 2.2Appreciation and depreciation
Name: ______
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1 / The painting Elisa bought for $560 from an art exhibition appreciates (increases in value) by 15% p.a. If this rate of appreciation continued, determine the value of the painting after 25years. / / 42 / A company car purchased for $42000 depreciates at 10% per annum straight line depreciation.
(a)Calculate the salvage value of the car
after 4years.
(b)Calculate the total depreciation over the first 7 years.
(c)How long will it take until the car will reach its scrap value of $5000? /
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3 / A factory writes off 4.5% per annum for its building with the current value of $250000. If the adopted method to calculate depreciation is straight line, find the value of the factory in 10years’ time. /
So, the value of the factory in 10 years’ time is $137500. / 5
4 / The purchase price of a boat is $45000. If it depreciates by 10% p.a., calculate the salvage value of the boat after 5 years. / / 4
5 / A $30000 new car depreciates by 12% p.a. Calculate the amount by which the vehicle depreciates in 10 years. / / 4
6 / A $30000 new car can be depreciated under straight line depreciation at $3500 per year or under declining balance at 15% p.a.
(a)Complete the table below showing the value of the car under both schemes for a period of 5 years.
(b)Draw a graph of both the straight line and declining balance depreciation and use the graph to show the point at which the straight line value of the car falls below the declining balance value. / (a)
(b)
The straight line value falls below the declining balance value after a period of 5years. / 8
7 / The Australian Taxation Office allows depreciation on tools of trade as a legitimate tax deduction.
A plumber purchases tools to the value of $15000. He is allowed a tax deduction of 30%p.a. for depreciation of these tools. When the salvage value of the tools falls below $5000, the plumber is allowed to write off the tools on the next year’s tax return.
Complete the table below and determine when the tools can be written off.
/
The tools can be written off after a period of 5years. / 7
Use the annuity tables on page 90 of your text book for questions 8, 9 and 10.
8 / Find the future value of an annuity where $2000 is deposited at the end of each year into an account that pays 5% p.a. interest, compounded annually for 10 years. / / 4
9 / If $800 is paid yearly into an annuity at 3%p.a. for 6 years, with interest compounded annually, what would be the present value of the annuity? / / 4
10 / Chris deposits $1000 per year at the end of each year into an annuity fund. At the end of 10years he expects to collect $13180.80. What interest rate is his investment? /
Looking along the row for 10 periods gives a value of 13.1808 under the 6% interest column.
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