• avatar says

      For non scientific calculator, we can calculate discount rate as follow

      For 1st Year : 1/1+10.5% = 0.905
      For 2nd Year: 0.905/1+10.5% = 0.819
      For 3rd Year: 0.819/1+10.5% = 0.741 and so on….

      In Annuity Factor suppose for 3 years

      For 3rd Year: 0.819/1+10.5%= 0.741-1 / 10.5% = 2.465

      or in simple add all three years discount rate (0.905+0.819+0.741)

  1. avatar says

    In the annuity depreciation example a point was made that althoigh RI remains flat throughout the 5 years and ROI does not. However, if we use the opening BS figure to calcualte the ROI then ROI also remains flat at 11%. Can someone advise if we can calculate the ROI in this to demonstrate that annuity depreciation does indeed work well for ROI calculations in the same way as RI does.

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