A piece of equipment cost a certain factory Rs.600,00. If it depriciates in value, 15% the first, 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?

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Solution

Hi!

Here is the answer to your question.

Cost of the equipment in the end of first year = Rs 600 – 15% of Rs 600 = Rs 600 – Rs 90 = Rs 510

Cost of the equipment in the end of second year = Rs 600 – 13.5% of Rs 600 = Rs 600 – Rs 81 = Rs 519

Cost of the equipment in the end of 3^rd year = Rs 600 – 12% of Rs 600 = Rs 600 – Rs 72 = Rs 528

The numbers 510, 519, 528, … are in A.P whose first term is 510 and the common difference is 9.

∴ Cost of the equipment at the end of 10 year = a + (10 – 1) d = 510 + 9 × 9 = Rs 591

Hope! You got the answer.

Cheers!

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