First year interest: 500*0. 1=50.

The theoretical basis of sinking fund method is that the purpose of depreciation is to keep simple reproduction.

In order to buy equipment in a few years.

There is no need to save the arithmetic average of the original value and service year of the equipment every year.

Due to the increasing interest, only a small amount of money needs to be withdrawn every year, that is, depreciation according to the sinking fund method, so that the original value of the equipment can be obtained at the end of the service life, and the principal can always be 5 million by the end of five years.

If it is the depreciation amount of the first year: 500 * 1/(S/A, 10%, 5) = 500 * 0.1638 = 81.90.

Second year interest: 500-81.9) * 0.1= 41.81.

In the second year of depreciation, you can consider the operation of the sinking fund to pay off debts.

According to the application of sinking fund method, the company should pay the same amount every year, that is to say, the company pays interest to the lender every year. On the other hand, paying sinking fund is equivalent to the interest and depreciation used in depreciation method.

So the depreciation in the second year is reversed:131.9-41.81= 90.09.

Interest in the third year: 500-81.9-90.09) * 0.1= 32.80.

Backward depreciation in the third year:131.9-32.80 = 99.10.

Interest for the fourth year: 500-81.9-90.09-99.1) * 0.1= 22.89.

Depreciation in the fourth year:131.9-22.89 =109 438+0.

As for the fifth year, if I have not miscalculated, it seems that the book has miscalculated.

If the annual depreciation amount is 1 19.82.

The total depreciation in five years is less than 500.

It should be:

Backward depreciation in the fifth year: 500-81.9-90.09-99.1-kloc-0/09.01=19.9.

Then the interest is reversed:131.90-119.90 =12.0.