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Question

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 3rd 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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