for i) why did i divide by 1.05^2???

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On January 1, 2017, ABC bought equipment for $100,000. ABC paid $80,000 in cash and financed the rest with a 2-year non-interest-bearing note payable, due on December 31,2018 . The going interest rate was 5%. The asset is expected to have a useful life of 8 years and a salvage value at the end of its useful life of $5,000. a) Prepare the journal entries for the above data on January 1, 2017, December 31, 2017 and December 31,2018 under i) The straight-line method and ii) the double-declining balance method. b) Assume that is now June 30,2022 and ABC had been recording the depreciation expense using the straight-line method as per its original estimates above. On that date, it realized that the equipment would have a remaining life of 4 years and a salvage value of $2,000 at that date. What is the total depreciation expense to be reported for the year-ended December 31,2022? Question 1: i) Jan 1,2017: Equipment 98,149 Note Payable* Cash 18,149 80,000 20,000/(1.05)2 Dec 31, 2017; Depreciation Expense 11,644 Acc. Depreciation 11,644 ** (98,1495,000)/8 Interest expense*** 907