Скачать или смотреть 💼📉 “Inflation and Depreciation: Tracking the Value of Assets Over Time”

This Financial Mathematics problem explores how inflation and depreciation affect the value of assets such as equipment over time.

A company buys a photocopier for R150 000 on 1 July 2022 and plans to replace it after 5 years, using it as a trade-in. The tasks involve:

(6.1.1) Calculating the future inflated price of a new photocopier in 2027, given an average inflation rate of 6.5% per annum, and

(6.1.2) Determining the trade-in value of the old photocopier after 5 years if it depreciates at 9% per annum using the straight-line method.

This exercise applies key Financial Maths concepts like:

The compound interest formula for inflation (future value),

The straight-line depreciation formula for loss in value, and

The connection between real value, cost increase, and asset reduction over time.

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