31. 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.

Answers (1)

Cost of machine = Rs. 15625

Machine depreciate each year by 20%.

Therefore, its value every year is 80% of the original cost i.e. \frac{4}{5} of the original cost.

\therefore Value at the end of 5 years 

                                            =15625\times \frac{4}{5}\times \frac{4}{5}\times \frac{4}{5}\times \frac{4}{5}\times \frac{4}{5} 

                                            =5120

Thus, the value of the machine at the end of 5 years is Rs. 5120

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