### How to Find the Depreciation Rate

Learn how to how to find the Depreciation Rate (in percent) with the following formula and example:

Formula:

Rate of Depreciation = Annual depreciation / Total depreciation

Example:

Calculate the rate of depreciation of a car from the following data:

Cost: $45,000

Expected Life: 20 years

Scrap Value: $5,000

Answer:

Total depreciation = 45000 - 5000 = $40,000

Annual depreciation = (45000-5000)/20 = $2,000

Rate of Depreciation = 2000/40000 = 0.05 = 5%

Formula:

Rate of Depreciation = Annual depreciation / Total depreciation

Example:

Calculate the rate of depreciation of a car from the following data:

Cost: $45,000

Expected Life: 20 years

Scrap Value: $5,000

Answer:

Total depreciation = 45000 - 5000 = $40,000

Annual depreciation = (45000-5000)/20 = $2,000

Rate of Depreciation = 2000/40000 = 0.05 = 5%