Students learn how to calculate depreciation, which is the decrease in value of an asset over time, using methods such as straight-line and reducing balance. They also explore inflation, which is the general increase in prices and fall in the purchasing value of money. By understanding and applying these calculations, students gain insights into how these economic factors affect finances and asset management.

Depreciation refers to the systematic reduction in the recorded cost of a fixed asset over its useful life, a concept crucial for asset management and accounting. Inflation, on the other hand, is an economic phenomenon of price increases, which affects buying power and economic decisions. Students explore the causes and effects of both processes, learning to differentiate between nominal and real values in economic contexts.

Students examine how depreciation and inflation are encountered and managed in everyday life and in business. For example, depreciation is crucial in calculating tax deductions for business assets, while inflation influences personal and business financial planning, including savings, investments, and loans. Understanding these concepts helps individuals and businesses make informed financial decisions in a dynamically changing economic environment.