Q.1= 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 ?
Dear Student!
Here is the answer to your query.
Cost of equipment in the end of first year= Rs 600000 – 15% of 600000
= Rs 600000 – Rs 90000 = Rs 510000
Cost of equipment in the end of second year = Rs 600000 – 13.5% of 600000
= Rs 600000 – Rs 81000 = Rs 519000
Cost of equipment in the end of third year = Rs 600000 – 12% of Rs 600000
= Rs 600000 – Rs 72000 = Rs 528000
The numbers 510000, 519000, 528000 are in A.P.
Whose first term in 510000 and common difference is 9000
∴ Cost of equipment at the end of 10 years
= a + (10 – 1) d = 510000 + 81000 = Rs 591000
Cheers!