The value of a factory machine depreciates by 1... - SS3 Mathematics Financial Arithmetic Question

The value of a factory machine depreciates by 15% of its value in the beginning of each year. If the machine cost N7.5 million, find the book value after 3 years.

\[\mathbf{1}\mathbf{st}\mathbf{\ year:}\]
\[Value\ of\ car:\]		\[N7,500,000\]
\[15\%\ depreciation:\]	\[(\frac{15}{100} \times 7500000)\]	\[N1,125,000\]
\[Value\ after\ one\ year:\]		\[N6,375,000\]

\[\mathbf{2}\mathbf{nd}\mathbf{\ year:}\]
\[Value\ of\ car:\]		\[N6,375,000\]
\[15\%\ depreciation:\]	\[(\frac{15}{100} \times 1200000)\]	\[N956,250\]
\[Value\ after\ 2\ years:\]		\[N5,418,750\]

\[\mathbf{3}\mathbf{rd}\mathbf{\ year:}\]
\[Value\ of\ car:\]		\[N5,418,750\]
\[15\%\ depreciation:\]	\[(\frac{15}{100} \times 960000)\]	\[N812,812.50\]
\[Value\ after\ 3\ years:\]		\[N4,605,937.50\]

\[Therefore,\ book\ value\ after\ 3\ years\ = \ N4,605,937.50\]

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