A plant costing ₦500,000 has an estimated useful life of 8 years and a scrap value of ₦20,000. Using the straight-line method, what is the depreciation rate per annum (to the nearest whole number)?

Annual depreciation = (₦500,000 − ₦20,000) ÷ 8 = ₦480,000 ÷ 8 = ₦60,000. Depreciation rate = (₦60,000 ÷ ₦500,000) × 100 = 12%. Some candidates mistakenly calculate the rate on the depreciable amount (₦60,000 ÷ ₦480,000 ≈ 12.5% ≈ 13%), giving option B, but the standard practice is to express the rate as a percentage of original cost.