DB Function
Calculate depreciation using the declining balance method.
Task:
You are analyzing the depreciation of an asset and want to know the depreciation for a specific period. Calculate the depreciation for period 1 in cell B7 using the DB function, given the cost, salvage value, life, and period.
Learning Objectives:
- Learn DB function
- Understand declining balance depreciation
- Practice asset accounting
Solve without hints for +5 XP
The data in this exercise
This is the grid you start with. Cell references in the task — B6, C2 — point at the row numbers and column letters below.
| A | B | |
|---|---|---|
| 1 | Parameter | Value |
| 2 | Cost | 24000 |
| 3 | Salvage | 3000 |
| 4 | Life | 10 |
| 5 | Period | 1 |
| 6 | Month | 12 |
| 7 | DB |
What this exercise teaches (contains the answer)
The DB function is useful for accounting and financial analysis, allowing you to determine the depreciation of an asset over time. It has one quirk worth knowing: the rate it derives from cost, salvage and life is rounded to three decimals before any period is worked out. Here 0.187748 becomes 0.188, which is why the first year is exactly 4512 rather than 4505.94. Small, and it compounds across the whole schedule.