Step-by-step explanation:
Depreciation of Long Term Assets
As with most types of assets, long term assets needs to be depreciated over the course of their useful life. It is because a long term asset is not expected to generate a benefit for an infinite amount of time.
Answer:
Inflation
Step-by-step explanation:
The rising costs of goods and services mean that $1 in 2022 will be worth more than $1 in 2032. This is called inflation.
Let's just say you put $200,000 in a savings account in 2000. That could've purchased you a 4 bedroom house at the time.
You keep the money in the account for over 20 years. And in 2020, you want to buy a new home with the money you have saved.
However, you can only buy a 2 bedroom house, because the rising costs of the market, increased the cost, or depreciated your savings.
This is called inflation.
