We are using sum-of-year digits method to calculate depreciation.

To calculate the sum-of-year digits, you can use one of the following formula. 1+2+3+...+n. or .

Suppose that we have acquired a building (cost: $1.3 million, salvage value: $300,000 and useful life of 5 years).

What would be the book value at the end of the 5th year?

$100,000

$200,000

$300,000

$400,000