Question

How many years will it take for equipment with an initial value of Rs. $2000$ to reach its scrap value of Rs. $1000$ if depreciation is reducing-balance at $15\%$ p.a. of the current value?

• A. $1$
• B. $2$
• C. $3$
• D. $4$

Answer 1

Answer: (C)

$3$

New Value $=1000$

Rate $=15\%p.a.$

Original value $=2000$

Time $=t$

$2000-\frac{2000\times 15\times t}{100}=1000$

On solving , we get $t\approx 3.34years$

Therefore, we can say that $t=3$ years.