A piece of equipment cost a certain factory Rs 6,00,000. 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 10 years, all percentages applying to the original cost?

By Ritesh|Updated : November 13th, 2022

At the end of 10 years, all percentages applying to the original cost is Rs. 105000. The item of equipment loses 15% of its value in the first year, or

15/100 × 600,000 = Rs.90,000

∴Value depreciated in 1st year = Rs.90,000

In the second year, the equipment depreciates at a rate of 13.5%, i.e.

135/1000×600,000 =Rs.81000

∴Value depreciated in 2st year =Rs.81,000

The value after 3rd year = 12/100 × 600000

∴ Value depreciated in 3rd year = Rs.72000

The the series of depreciation become 90,000, 81,000, 72, 000...with,

a =90,000 and d =−9000

The total depreciation in 10 years:

S10 = 10/2 [2 × 90000 + (9) (-9000)]

= 5(180000 - 81000)

= 5 (99000)

= Rs. 495000

The cost of machine after 10 years:

= 600000 - 495000

= Rs. 105000

Cost Price (CP)

Cost price refers to the price paid to purchase a good or commodity. Denoted as CP as well. This cost price is divided into two more categories:

Fixed Cost: Under any conditions, the fixed cost remains constant.

Variable Cost: It may change based on the quantity of units and other elements.

Selling Price (SP): The selling price is the price at which a product is sold. Typically, it is identified as SP. also known as a sale price on occasion.

Summary:

A piece of equipment cost a certain factory Rs 6,00,000. 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 10 years, all percentages applying to the original cost?

A piece of equipment cost a certain factory Rs 6,00,000. If it depreciates in value, 15 % the first, 13.5 % the next year, 12 % the third year, and so on. At the end of 10 years, all percentages applying to the original cost is Rs. 105000.

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