## Fixed Installment Method With Residual Value

Fixed Installment method is also known as the straight line method and the original cost method. In this method the scrap value is reduced from cost of the asset and divided by the number of years of its expected period of service.

Deprecation calculated according to the fixed installment method is charged every year and at the end of the life of asset,the amount of asset becomes equal to its scrap value.

## o-e/n

Here,o=original cost of asset,e=estimated residual value,n=number of years of estimated life of asset.

ENTER THE VARIABLES TO BE USED IN THE FORMULA