Question

A manufacturer reckons that the value of a machine, which costs him Rs. 15625. will depreciate each year by 20% . Find the estimated value at the end of 5 years ?

Answer 1

Hi

Here is your answer,

Cost of machine = Rs. 15625

It will depreciate each year by 20%

Therefore, Cost of the machine at the end of first year

      = ( 15625 - 15625 × 20/100)

= Rs. (15625 - 3125 ) = Rs. 12500.

Cost of machine at the end of second year

= Rs. ( 12500 - 12500 × 20/100)

= Rs. [ 12500 - 2500] = Rs. 10000

Cost of machine at the end of third year 

= Rs. ( 10000 - 10000 × 20/100)

= Rs. [10000 - 2000] = Rs. 8000

Cost of the machine at the end of fourth year

= Rs. ( 8000 - 8000 × 20/100)

= Rs. [ 8000 - 1600] = Rs. 6400

Cost of machine at the end of fifth year

= Rs. ( 6400 - 6400 × 20/100)

= Rs. [ 6400 - 1280] = Rs. 5120.



Hope it helps you !