a piece of equipment cost a certain factory Rs600000 If it depreciates 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 the 10 years all % applying to the original cost?

Asked by khushboo panwar | 15th Mar, 2011, 12:00: AM

Expert Answer:

Dear Student,
 
Here is the solution:
 
Let the cost of an equipment is 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 total cost being Rs. 6,00,000/100  x  17.5 = Rs. 1,05,000.
Regards
Team Topperlearning.

Answered by  | 16th Mar, 2011, 07:48: AM

Queries asked on Sunday & after 7pm from Monday to Saturday will be answered after 12pm the next working day.