If a property depreciates at 2.5% per year, what is the accumulated depreciation after five years?

To calculate the accumulated depreciation of a property depreciating at a rate of 2.5% per year over five years, it is important to apply the concept of straight-line depreciation. This means that after each year, the property's value decreases by 2.5% of its original value.

Assuming the original value of the property is $1,000,000, the annual depreciation would be calculated as follows:

1. Annual depreciation: 2.5% of $1,000,000 is calculated as $1,000,000 * 0.025 = $25,000.

2. Total depreciation over five years: Since the property depreciates consistently each year, the total depreciation after five years would be 5 times the annual depreciation, which is $25,000 * 5 = $125,000.

However, if the property was originally worth $2,000,000, the accumulated depreciation over five years would be:

1. Calculate annual depreciation: $2,000,000 * 0.025 = $50,000.

2. Total depreciation after five years: $50,000 * 5 = $250,000.

In contrast, if one considers a property valued significantly