APPENDIX 2: Annuity Depreciation under Anton Contribution Distribution

Assuming Anton contribution distribution from Formula (12) Formula (18) defines the annuity depreciation of a single capital investment g as

Image: Formula (A2.1).

For t = 1 we have, considering that v(0) = g,

Image: Formula (A2.2).

Thus the annuity depreciation d(1) is equal the straight-line depreciation (1/N)g. Likewise, for t = 2 we have

Image: Formula (A2.3).

Repeating the process the general d(t) becomes

Image: Formula (A2.4)

which, again, is equal the straight-line depreciation.

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