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

To find the accumulated depreciation after five years at a rate of 2.5% per year, you first need to understand how depreciation is calculated over multiple years.

Assuming the property value is $10,000,000, you would calculate the annual depreciation by taking 2.5% of the property value. Each year, you reduce the property’s value by that percentage. Over five years, you accumulate this yearly depreciation.

The calculation looks like this:

1. For the first year:

• Depreciation = $10,000,000 * 0.025 = $250,000

2. For the second year, the property value now is $10,000,000 - $250,000 = $9,750,000.

• Depreciation = $9,750,000 * 0.025 = $243,750

3. Continuing this way, each subsequent year's depreciation is calculated based on the adjusted property value after accounting for previous depreciation.

However, if you're calculating the total depreciation rather than using the declining balance method, you would simply calculate it based on the initial value for simplicity.

Over five years, if you consider the straight-line approach:

Total depreciation over five years