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A piece of equipment cost a certain factory Rs. 600,000. If it depreciates in value, 15% thefirst year, 13.5 % the next year, 12% the third year, and so on, what will be its value at the endof 10 years, all percentages applying to the original cost?A] 2,00,000B] 1,05,000C] 4,05,000D] 6,50,000

Question

A piece of equipment cost a certain factory Rs. 600,000. If it depreciates in value, 15% thefirst year, 13.5 % the next year, 12% the third year, and so on, what will be its value at the endof 10 years, all percentages applying to the original cost?A] 2,00,000B] 1,05,000C] 4,05,000D] 6,50,000

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Solution

The value of the equipment depreciates each year by a certain percentage of the original cost. This means that each year, the value of the equipment decreases by a certain amount.

Here's how you can calculate the value of the equipment at the end of 10 years:

  1. In the first year, the equipment depreciates by 15% of the original cost. So, the depreciation amount is 15/100 * 600,000 = Rs. 90,000.

  2. In the second year, the equipment depreciates by 13.5% of the original cost. So, the depreciation amount is 13.5/100 * 600,000 = Rs. 81,000.

  3. In the third year, the equipment depreciates by 12% of the original cost. So, the depreciation amount is 12/100 * 600,000 = Rs. 72,000.

  4. The pattern continues, with the depreciation percentage decreasing by 1.5% each year.

  5. To find the total depreciation over 10 years, you would add up all the depreciation amounts.

  6. Finally, to find the value of the equipment at the end of 10 years, you would subtract the total depreciation from the original cost of the equipment.

However, the problem does not provide the depreciation percentages for years 4 through 10. If the pattern continues, the percentages would be 10.5%, 9%, 7.5%, 6%, 4.5%, 3%, and 1.5%. You would need to calculate the depreciation for each of these years and add them to the total depreciation for the first three years. Then subtract this total depreciation from the original cost to find the value of the equipment at the end of 10 years.

Without these calculations, it's not possible to determine the correct answer from the options provided.

This problem has been solved

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