Derivation of Formula for Sum of Years Digit Method (SYD)

The depreciation charge and the total depreciation at any time m using the sum-of-the-years-digit method is given by the following formulas:
 

Depreciation Charge:

$d_m = (FC - SV) \dfrac{n - m + 1}{SYD}$

 

Total depreciation at any time m

$D_m = (FC - SV) \dfrac{m(2n - m + 1)}{2 \times SYD}$

 

Where:
FC = first cost
SV = salvage value
n = economic life (in years)
m = any time before n (in years)
SYD = sum of years digit = 1 + 2 + ... + n = n(1 + n)/2
 

Derivation of formula for volume of a frustum of pyramid/cone

Frustum of a pyramid and frustum of a cone
 

Frustum of a pyramid and frustum of a cone

 

The formula for frustum of a pyramid or frustum of a cone is given by
 

$V = \dfrac{h}{3} \left[ \, A_1 + A_2 + \sqrt{A_1A_2} \, \right]$

 

Where:
h = perpendicular distance between A1 and A2 (h is called the altitude of the frustum)
A1 = area of the lower base
A2 = area of the upper base
Note that A1 and A2 are parallel to each other.
 

Relationship Between Arithmetic Mean, Harmonic Mean, and Geometric Mean of Two Numbers

For two numbers x and y, let x, a, y be a sequence of three numbers. If x, a, y is an arithmetic progression then 'a' is called arithmetic mean. If x, a, y is a geometric progression then 'a' is called geometric mean. If x, a, y form a harmonic progression then 'a' is called harmonic mean.
 

Let AM = arithmetic mean, GM = geometric mean, and HM = harmonic mean. The relationship between the three is given by the formula
 

$AM \times HM = GM^2$

 

Below is the derivation of this relationship.