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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Given, the cost of the machine = Rs 15625
Also, given that the machine depreciates by 20% every year.
Hence, its value after every year is 80% of the original cost, i.e., 4/5th of the original cost.
Therefore, the value at the end of 5 years =
= 5 × 1024 = 5120
Thus, the value of the machine at the end of 5 years will be Rs 5120.
