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    • 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.
    Thanks

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