Diminishing value rate..

Blue Bagger

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Can someone hep me work out the formula and correct answer for the following:

What is the diminishing value rate an asset that has been depreciated if it was bought 4 years ago for $15000 and is now valued at $$4746?


I am using the formula Rate = 1 - (Current Value (periods)) 1/periods
Cost

so far i have got thus far - rate = 1 - (4746(4)) 1/4
15000

I am confused about how to calculate the periods. Is anyone able to help make some sense of this for me.

Thanks.
 
Can someone hep me work out the formula and correct answer for the following:

What is the diminishing value rate an asset that has been depreciated if it was bought 4 years ago for $15000 and is now valued at $$4746?


I am using the formula Rate = 1 - (Current Value (periods)) 1/periods
Cost

so far i have got thus far - rate = 1 - (4746(4)) 1/4
15000

I am confused about how to calculate the periods. Is anyone able to help make some sense of this for me.

Thanks.
If you assume rate = r, then

4746 = 15000 * (1-r)^4

solve for 'r'.
 
The answer depends on what method of depreciation is being used. It is virtually impossible to decipher your formula the way you have written it, let alone make sense of it. What would make sense if we are talking about straight line depreciation and no assumed salvage value is this formula:

[MATH]r = \dfrac{d}{c} = \dfrac{1}{n} - \dfrac{v}{cn}, \text { where}[/MATH]
r = rate of depreciation per period,
d = amount of depreciation per period
c = original cost
v = net book value now
n = number of periods that depreciation has accrued.

That would make sense because

[MATH]v = c - dn \implies dn = c - v \implies d = \dfrac{c - v}{n} \implies \dfrac{d}{c} = \dfrac{c - v}{cn} = \dfrac{1}{n} - \dfrac{v}{cn}[/MATH].

If that is the relevant formula, then

[MATH]r = \dfrac{1}{4} - \dfrac{4746}{4 * 15000} = 17.09\%.[/MATH]
That looks very close to a depreciation period of 6 years with some nominal salvage value.

But all of this is just informed guess work unless you can give us a mathematically coherent description of the formula you are supposed to use.
 
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