Question

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

A
125000
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B
115000
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C
100000
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D
105000
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Solution

## The correct option is C 105000The percentage of depreciation at the end of 1st, 2nd and 3rd year are 15%,13.5%,12% which are in A.P with a=15% and d=−1.5%.Hence, percentage of depreciation in the 10th year =a+(10−1)d=15+(10−1)×(−1.5)=1.5Also total value depreciation in 10 year =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 at the end of 10 years=Rs.17.5100×600000=Rs.105000.

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