    Question

# A piece of equipment cost a certain factory Rs 600,000. If it depreciates in value, 15% the first year, 13.5 % the next year, 12 % the third year, and so on, what will be its value at the end of 10 years, all percentages applying to the original cost?

A
Rs 2,00,000
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B
Rs 1,05,000
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C
Rs 4,05,000
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D
Rs 6,50,000
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Solution

## The correct option is B Rs 1,05,000Let the cost of an equipment is Rs. 100. Now the percentages of depreciation at the end of 1st,2nd,3rd years are 15,13.5,12, which are in A.P., with a=15 and d=−1.5.Hence, percentage of depreciation in the tenth year =a+(10−1)d=15+9(−1.5)=1.5Also total value depreciated in 10 years=15+13.5+12+...+1.5=82.5Hence, the value of equipment at the end of 10 years=100−82.5=17.5.The total cost being Rs. 6,00,000/100×17.5=Rs.1,05,000.  Suggest Corrections  0      Similar questions
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