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7 September, 09:53

A tractor was purchased for $30,000 six years ago. what is the value of the tractor today if the depreciation rate was 2.5%?

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  1. 7 September, 09:56
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    Initial cost = $30,000

    Depreciation rate = 2.5%

    Depreciation expense per year = 30,000*2.5/100 = $750

    In six years,

    Depreciation = 6*750 = $4,500

    Value of the tractor = Initial cost - Depreciation = $30,000 - $4,500 = $25,500
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