A piece of equipment costs Rs. 600000 in a certain factory. If it depreciates in value 1% 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 costs?

Let the cost of an equipment be Rs. 100.

Now the percentages of depreciation at the end of 1st,2nd,3rd years are 15, 13.5,12, which are in A.P., with a=15 and d= -1.5.

Hence, percentage of depreciation in the tenth year = a + (10-1) d = 15 + 9 (-1.5) = 1.5

Also total value depreciated in 10 years = 15 + 13.5 + 12 + … + 1.5 = 82.5

Hence, the value of equipment at the end of 10 years=100 – 82.5 = 17.5

The required total value = 17.5/100 x 600000 = 105000

Was this answer helpful?

  
   

0 (0)

Upvote (0)

Choose An Option That Best Describes Your Problem

Thank you. Your Feedback will Help us Serve you better.

Leave a Comment

Your Mobile number and Email id will not be published. Required fields are marked *

*

*

BOOK

Free Class

Ask
Question