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Depreciation
The depreciation function keys [SL], [DB] and [SOYD] calculate depreciation using the Straight-line, Declining Balance and Sum of Year Digits methods respectively.
Performing Depreciation Calculations
Depreciation keys calculate the amount of depreciation and the remaining depreciable value simultaneously. They use the following TVM registers as input values and take the current display value as the period number for which to determine the amount of depreciation.
- n - Useful life.
- PV - Initial cost of the asset.
- FV - Salvage value.
The return result is the amount of depreciation in the input period. In addition, the remaining depreciable balance is stored in the K memory register, and may be retrieved using [RCL]. If you are working in RPN mode, the depreciable balance is also placed in the Y stack register.
Example: You purchase a computer at a cost of $2000; it's salvage value after 5 years is $50. How much has it depreciated after two years, and what is the remaining depreciable balance? Use the Sum of Year Digits method.
2000 [PV] (initial cost) 5 [n] (useful life) 50 [FV] (scrap value) 2 [SOYD] Displays: 520.00 (depreciation in year 2) [X⇔Y] (retrieve Y register*) Displays: 780.00 (remaining depreciable balance)
* Algebraic users should recall the value in K register to retrieve the principal repaid. I.e. press [RCL] [K].
See also: TVM Compound Interest Calculations
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