Sum of Digit Depreciation Formula

Sum of Digit Depreciation Formula

Sum of digit can be calculated by the following formula. Sum of digit used to calculate proportionate depreciation for each year.

Sum of Digit =n (n+1)/2

Example

Year = 6

100,000

Calculate Depreciation

Solution

Sum of Digit =n (n+1)/2

=6 (6+1)/2

=6 (7)/2

=42/2

=21

Depreciation

First year Depreciation = 6/21 x 100,000

2^nd year Depreciation =   5/21 x 100,000

3^rd year depreciation =    4/21x 100,000

4^th year Depreciation =    3/21x 100,000

5^th Year Depreciation=     2/21 x 100,000

6^th Year Depreciation =   1/21 x 100,000