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Question
At the end of each year the value of a certain machine has depreciated by 20% of its value at the beginning of that year. If its initial value was Rs 1250, find the value at the end of 5 years.
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Solution
After each year the value of the machine is 80% of its value the previous year
So at the end of 5 years the machine will depreciate as many times as 5.
Hence, we have to find the 6th term of the G.P.
Whose first term a1 is 1250 and common ratio r is .8
Hence, value at the end 5 years = t6
= a1 r5
= 1250 (.8)5
= 409.6
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