Annuity Method Of Depreciation

In life, lots of things depreciate in value as they get older. (Unlike you. You’re a fine wine, darling. You get better with age.) The annuity method of depreciation is how you’ll figure out the change in value of something you own.

As noted by Farlex Financial Dictionary, the formula for this involves figuring out the internal rate of return (how much interest you get, which is a whole different story) times how much your asset was worth at the beginning of time. After this, you deduct how much it’s worth from how much it brings in on a yearly basis. Theeeeeen you take this figure and subtract it from how much it was worth LAST year. Yeah, it’s kind of complicated, but we can teach you how to do this when you’re ready.