Question

A flower vase costs 36,000. With an annual depreciation of 2,000, its cost will be 6,000 in how many years?

• A. 10
• B. 15
• C. 17
• D. 6

Answer 1

Answer: (B)

15

Answer 2

This problem involves linear depreciation. The vase’s value decreases by Rs.2,000 each year.

The formula for the number of years needed to reach a specific value is:

Number of Years = $\frac{\text{Initial Value - Final Value}}{\text{Annual Depreciation}}$.

Given:

Initial Value = Rs. 36,000,
Final Value = Rs. 6,000,
Annual Depreciation = Rs. 2,000.

Substitute into the formula:

Number of Years = $\frac{\text{Rs. 36,000 - Rs. 6,000}}{\text{Rs. 2,000}} = \frac{\text{Rs. 30,000}}{\text{Rs. 2,000}} = 15$ years.

Thus, it will take 15 years for the value of the vase to reduce to Rs.6,000.