Alabama Real Estate Practice Exam 2026 - Free Real Estate Practice Questions and Study Guide

The formula for calculating depreciation using the economic age-life method is (Effective age / Economic life) x Cost. This means the effective age is divided by the economic life, and then multiplied by the cost. Option B is incorrect because it adds the economic life to the cost, rather than dividing it by the effective age. Option C is incorrect because it subtracts the economic life from the cost, rather than dividing it by the effective age. Option D is incorrect because it divides the economic life by the effective age and then subtracts the cost, which is not the correct formula for this method of depreciation.