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Question
A manufacturing company is allowed to charge a 10% depreciation on its stock. The initial value of the stock was Rs.60,000/-. After how many years the value of the stock will be 39366?
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Solution
Given, rate of depreciation = r = 10%
Initial value of stock = V = ₹ 60,000
The depreciated value of stock = D.V.
= ₹ 39,366/-
By using,
D.V. = V`(1 - "r"/100)^"n"`
`39,366 = 60,000(1 - 10/100)^"n"`
`(1 - 1/10)^"n" = (39,366)/(60,000)`
`(9/10)^"n" = "6,561"/"10,000" = (9/10)^4`
∴ n = 4
∴ The value of the stock will be ₹ 39,366/- after 4 years.
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