The original cost of a motorcycle was $18,000. The estimated life of the motorcycle is 8 years. What is the straight-line rate?

Question

Quizplus · Accepted Answer

To find the straight-line rate, you need to divide the original cost by the estimated life. So, straight-line rate = $18,000 / 8 years = $2,250 per year. To find the percent rate, you need to divide the straight-line rate by the original cost and multiply by 100. So, percent rate = ($2,250 / $18,000) x 100 = 12.5%. Therefore, the best choice is B.

The Original Cost of a Motorcycle Was $18,000