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# TOPIC: Sum of Years' formula

## Sum of Years' formula 4 years 7 months ago #7296

 Damien Topic Author Visitor Hi I purchased the 105 Formula Questions. I'm looking to clarify the answer to question No.94. The answer given is €17,272. When I calculate using the 'Sum of Years' formulas I get an answer of €17,100. Below is the calculation for the first three years. Year 1 – 10/55 = 18% = €17,100 Year 2 – 9/55 = 16% = €15,200 Year 3 – 8/55 = 14% = €13,300 Can you show me we're I'm going wrong please. Regards Damien Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.

## Sum of Years' formula 4 years 7 months ago #7313

 Tracey South Offline Expert Boarder Posts: 131 Karma: 6 Thank you received: 27 Hi Damien: Can you provide the full question please? We can't provide any input unless we know the purchase price and exactly what the question is asking you. Thanks....Tracey Community Moderator Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.

## Sum of Years' formula 4 years 6 months ago #7407

 Damien Topic Author Visitor Sorry for the delay Tracey — see full question below. Question 94: Your company owns an asset with an original value of \$100,000. This asset will be depreciated using the Sum-of-Years' Digits Method over the period of 10 years. At the end of its life, the asset will have a scrap value of \$5,000. How much is the depreciation in year 1? A.) \$18,181 B.) \$17,272 C.) \$9,500 D.) \$19,000 Regards Damien Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.

## Sum of Years' formula 4 years 6 months ago #7408

 Rahul Kakkar Offline Gold Boarder Posts: 161 Karma: 9 Thank you received: 54 Hi Damien, Sum of the Years' Digits = 1 + 2 + 3 + 4 + 5 + 6 + 7 + 8 + 9 + 10 = 10(10 + 1) ÷ 2 = 55 Depreciable Base = \$100,000 − \$5,000 = \$95,000 Depreciation in year one = 10/55 x 95,000 = \$17,272 The difference is happening because you were first converting 10/55 into a percentage and then multiplying it by 95,000. By converting it into a percentage, the value was being rounded off which is why you're getting a difference of 17,272 - 17,100 = \$172. Hope this helps. Rahul Kakkar, PMP, MBA Community Moderator How are we doing? Your opinion matters. To help us improve, please check out our survey at www.surveymonkey.com/s/pmpexamforum Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.
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