Trick to Fast Calculation of Depreciation in WDV Method
Calculate First
Year Depreciation at given rate
First Year
Depreciation = (Assets Cost*Depreciation Rate)
For Second year and
own wards
Second Year Depreciation
= [First Year Depreciation*(1 – Depreciation Rate)]
Third Year
Depreciation = [Second Year Depreciation*(1 – Depreciation Rate)]
And so on…
Example: -
Assets Cost = Rs.
1000000
Rate of
Depreciation = 20%
Useful life of
Assets = 8 Years
Method of
Depreciation is WDV
Calculate Annual
Depreciation.
Solution:-
Year
|
Calculation
|
Depreciation
|
1
|
1000000*20%
|
200000.00
|
2
|
200000*(1
- .20)
|
160000.00
|
3
|
160000*(1
- .20)
|
128000.00
|
4
|
128000*(1
- .20)
|
102400.00
|
5
|
102400*(1
- .20)
|
81920.00
|
6
|
81920*(1
- .20)
|
65536.00
|
7
|
65536*(1
- .20)
|
52428.80
|
8
|
52428(1
- .20)
|
41943.04
|
Installment
Calculation
Equated Annual/Monthly
Installment = (Loan Amount)/ Present Value Annuity Factor at Pre Tax Interest
Rate
Example: -
Loan Amount = Rs.
600000
Rate of Interest =
14%
Tenure of Loan = 6
Years
Calculate Annual
Installment.
Solution: -
Annual Installment
= 600000/3.889
Annual Installment
= Rs. 154281.31
Trick to Fast
Calculation of Interest on Loan When Principal is paid equal Installment
Method I
Calculate First
Year Interest at given rate
First Year Interest
= (Loan Amount*Rate of Interest)
For Second year and
own wards
Second Year
Interest = [First Year Interest - (First Year Interest/Tenure of Loan)]
Third Year Interest
= [Second Year Interest - (First Year Interest/Tenure of Loan)]
And so on…
Example: -
Loan Amount = Rs.
250000
Rate of Interest =
20%
Tenure of Loan = 5
Years
Principal is
payable in equal Installment
Calculate Yearly
Interest on Loan
Solution: -
Year
|
Calculation
|
Interest
|
1
|
250000*20%
|
50000
|
2
|
50000
– (50000/5)
|
40000
|
3
|
40000-10000
|
30000
|
4
|
30000-10000
|
20000
|
5
|
20000-10000
|
10000
|
Note: - This
method is applicable only when Full Principal Amount is paid equally in given
tenure.
Method II
Calculate First
Year Interest at given rate
First Year Interest
= (Loan Amount*Rate of Interest)
Second Year
Interest = [(Loan Amount – Principal Paid)*Rate of Interest]
For Third year and
own wards
Third Year Interest
= [Second Year Interest – (First Year Interest - Second Year Interest)]
And so on…
Example: -
Loan Amount = Rs.
250000
Rate of Interest =
20%
Tenure of Loan = 5
Years
Principal is
payable in equal Installment
Calculate Yearly
Interest on Loan
Solution: -
Year
|
Calculation
|
Interest
|
1
|
250000*20%
|
50000
|
2
|
(250000-50000)*20%
|
40000
|
3
|
50000-(50000-40000)
|
30000
|
4
|
30000-10000
|
20000
|
5
|
20000-10000
|
10000
|
Dirty Power
Formula (A1/n)
Steps for
Calculation
Step I: - √ 12 Times
Step II: - - 1
Step III: - Divide by N
Step IV: - + 1
Step V: - 12 Times * and Equal to
Example: -
Calculate Value of
2331/11
Solution: -
Steps
|
Calculation
|
Value
|
I
|
12
Times √ 233
|
1.00133170586
|
II
|
-1
|
.00133170586
|
III
|
Divide
by 11
|
.00012106416
|
IV
|
+
1
|
1.00012106416
|
V
|
12
Times * and =
|
1.64189122272
|
