TABLES 3
ceases to be useful, and the time when the article will go out of
use. But this value is dependent too upon the probable life of
a new article of the same kind. The remaining value of several
articles with the same expectancy of which one is in the
10-year life class, another in the 20-year class and another in the
go-year class will not be the same, because the proportional serv-
ice yet to be expected when compared with that of new articles
will, in these cases, vary inversely as 1o to 20 to 40, and the
remaining values will depart widely from each other. If the
expectancy, for example, of each of three such articles is 5 years,
and 6 per cent interest be made the basis of the calculation, the
remaining values will be 57.23 per cent, 36.73 per cent and 28.00
per cent of the cost of replacement. The article with the prob-
able life new of 10 years has the highest value for the reason
that its remaining service years are a larger proportion of its
probable life new than in the case of the other two articles with
longer probable life new.
Illustration of the Use of Table 27
What amount at the end of the 26th year will be in a sinking
fund for the retirement of a bond issue of $100,000 running 40
years, if the money accumulating in the sinking fund earns 6
per cent per annum?
On page 361 in the 40-year life section of Table 27 at year 27
(beginning of year 27 is the end of year 26) in the left-hand
column, the accrued amortization in the 6 per cent column |
for each $100 will be found to be $41.1637. Consequently,
the amount in the sinking fund to retire $100,000 will be
$41,163.70. The amount which will be added to the sinking
fund in the 27th year will be $2939.60.
Let it be assumed that by any means, such as inspection by
experts, the probable remaining term of usefulness of an electric
generator 13 years old has been found to be 11 years and that
the type of generator to which it belongs has a probable life new
of 20 years. What at 6 per cent interest is the accrued deprecia-
tion if the cost of the generator was $3000 and what is its re-
=r hee
