An asset costs ₹50,000 and will be sold for scrap at ₹5,000. It is depreciated by ₹4,500 a year by the linear method. What is its useful life?

Explanation

1. 01

   Useful life = (cost − residual value) ÷ yearly depreciation.

2. 02

   $\frac{50{,}000 - 5{,}000}{4{,}500} = \frac{45{,}000}{4{,}500} = 10$ years.