Here's a maths question for you:
NBV = X
Cost =A
Rate of depreciation (reducing balance)=B
Years = C
So, I calculate X = A x (1-B)^C
I am struggling to reverse the formula to give me a value for the number of years, where I know the original cost, the rate, and the current NBV.
This is a real life problem - rather than some homework!
Any advice appreciated,
Thanks,
Replies (11)
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Using Excel
In A1 turn Depreciation into a markup - B/(1-B)
in B1 enter NBV (including decimals)
in B2 enter B1+(B1*$A$1)
Drag and drop for no. of years
In this case using the right formula solves the problem but, in general, if you can't work out what the formula should be, it might also be worth having a look at Excel's Goal Seek feature (Data ribbon tab, What If? Analysis drop down). This can help you work 'backwards' from a known answer to the required input for a formula.