A machine costs ₹3,50,000, has a residual value of ₹50,000 and a useful life of 6 years. What is the yearly depreciation by the linear method?

Explanation

1. 01

   Spread the loss of value, cost minus residual value, evenly over the useful life.

2. 02

   $\frac{3{,}50{,}000 - 50{,}000}{6} = \frac{3{,}00{,}000}{6} = 50{,}000$ rupees a year.