explain how we got the depreciation and interest on capital

EXAMPLE 9-5 Economic Life of a Laptop Computer Determine the economic life of an $800 laptop computer. Your person rate is 10% per year. Annual expenses and year-end resale values are to be the following: Your personal interes le values are expected Year 1 Year 2 $150 $600 Software upgrades and maintenance Resale value at end of year Year 3 $300 $200 $200 $450 Solution The marginal cost of keeping the computer for each of the three years is a follows: Year 1 Year 2 Year 3 Upgrades and maintenance $150 Depreciation $200 Interest on capital at 10% $80 $200 $150 $60 $300 $250 $45 Total marginal cost $430 $410 $595