The annual depreciation rate is $163.33.
Depreciation rate is calculated using the formula
Annual Depreciation Rate =(Total Depreciable Cost)/(time) ..where time is in years.
In the given Question
The original cost of item = $500
Cost of item after 3 years = $10
Total Depreciable Cost = (original cost of item) -(Cost of item after 3 years)
=500-10
=$490
So,
Annual Depreciation Amount = (Total Depreciable Cost)/(time)
Annual Depreciation Amount =490/3=163.33
Hence, the item cost would depreciate $163.33 per year.
which means every year the amount will depreciate by $163.33
Therefore, the annual depreciation rate is $163.33 .
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