Grade 11 Depreciation financial mathematics

1. FINANCIAL MATHEMATICS
GRADE 11 DPRECIATION

2. Formulas for increase
• Simple interest : A= p(1+IN)

3. formulas for increase;
•Compound interest 𝑨 = 𝑷 𝟏 + 𝒊 𝒏

4. Depreciation
•Two types :
•Straight line depreciation
•Reducing balance Depreciation

5. Straight line depreciation

6. A=P(1-in)
•A= Accumulated amount
•P= Present Value
•I=interest
•N=number of years

7. •For his construction business Jims
father bought a truck 5 years ago
for R150000. Now he wants to sell
the vehicle. But the truck is worth
R900000.

8. Assets
• Things we owe that are valuable or useful suchas cars and laptops

9. BOOK VALUE
The original cost of
an asset minus the
depreciation

10. Scrap value
•The book value at
the end of an assets
life

11. Straight line depreciation
•Subtract the
equal
amount
every year
from the
purchase
price of an
asset

12. Reducing balance depreciation
•Subtract the
greatest amount
from the present
value for the first
year and smaller
amounts for each
year afterwards

13. Example 1
• Jims buys a new
mountain bike for
R15000. The
straight line
depreciation rate
is 21% per year.
What will his
mountain bike be
worth in 4 years
time?

14. Example 2
• Jims older brother
buys a 4 by 4 for
R385000. But after 6
years the 4 by 4will
only be worth
R1420000. What is
the annual rate of
depreciation using
straight line
depreciation?

15. Example 3
• It is Jim’s Job to mow the lawn at home. Jim’s parents buy a
new lawn mower for R1800. The straight line depreciation
rate is 20% . How long will it take for the new lawn mower to
be worth R0? In other words, find out when the lawn
mowers scrap value is zero?

16. References
Anon., 2007. Slide share. [Online]
Available at: https://www.slideshare.net/B33L4L/chapter-5-mathematics-of-finance?qid=71b8ba00-4dc6-4905-ac28-
86d654d3c3bc&v=&b=&from_search=12
[Accessed 18 September 2017].
Carter, T., 2011. slide share. [Online]
Available at: https://www.slideshare.net/B33L4L/chapter-5-mathematics-of-finance?qid=71b8ba00-4dc6-4905-ac28-
86d654d3c3bc&v=&b=&from_search=12
[Accessed 16 September 2017].
Mbhamali, T. N., 2014. Slide share. [Online]
Available at: https://www.slideshare.net/Mbhamalitn/financial-mathematics-for-grade-10-11-and-12?qid=dd87daf9-243a-4ae2-9954-
392a76e50ff1&v=&b=&from_search=8
[Accessed 14 February 2017].
Mfuphi, L. M., 2012. Slide Share. [Online]
Available at: https://www.slideshare.net/201035224/financial-mathematics?qid=fb78e76b-962c-495f-8063-
e47da3cb80ad&v=&b=&from_search=2
[Accessed 14 September 2017].
Ntuli, P., 2017. Slide share. [Online]
Available at: https://www.slideshare.net/PHINDILE_NTULI/financial-mathematics-79125178?qid=34ff6208-6030-4f42-be5f-
06732335f5e9&v=&b=&from_search=9
[Accessed 15 September 2017].