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(A) The initial cost of the machine is $P = 15625$.The rate of depreciation is $r = 20\% = 0.2$.The value of the machine after $n = 5$ years is given

Vedclass · Accepted Answer

$Rs. 5120$

Vedclass · Answer

(A) The initial cost of the machine is $P = 15625$.The rate of depreciation is $r = 20\% = 0.2$.The value of the machine after $n = 5$ years is given by the formula $V = P(1 - r)^n$.$V = 15625 	imes (1 - 0.2)^5$$V = 15625 	imes (0.8)^5$$V = 15625 	imes \left(\frac{4}{5}ight)^5$$V = 15625 	imes \frac{1024}{3125}$$V = 5 	imes 1024 = 5120$Thus,the estimated value at the end of $5$ years is $Rs. 5120$.

$A$ 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.

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