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An earth moving equipment costs Rs. 5,00,000 and has an estimated life of 10 years and a salvage value of Rs. 50,000. What uniform annual amount must be set aside at the end of each of the 10 years for replacement if the interest rate is 8% per annum and if the sinking fund factor at 8% per annum interest rate for 10 years is 0.069?

Answer & Solution
Correct Answer: Option A
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6 Comments
SANANDAN NATH
SANANDAN NATH 6 years ago
F=500000-50000=450000
F=P/sinking factor
Sinking factor=i/[{(1+i)^n}-1]
P=F*SF=450000*0.069=31050
Vikas Basanagoudr
Vikas Basanagoudr 6 years ago
F=500000-50000=450000
F=P/sinking factor
Sinking factor=1/(1+I)^n
P=F*SF=450000*0.069=31050
Ans a
HK Creation
HK Creation 6 years ago
Solve with method
Naveen Singh
Naveen Singh 7 years ago
Future value=((R X (1+i)^n -1)/i)
we have to find R=?
Future value =500000-50000=450000
i=0.08( as 8% rate of interest)
n=10 yrs
apply all and get the answer.
Rinku Das
Rinku Das 7 years ago
Please give the method of calcution
Prathik Patil
Prathik Patil 7 years ago
A