A machine is purchased for Rs 625000.

Question:

A machine is purchased for Rs 625000. Its value depreciates at the rate of 8% per annum. What will be its value after 2 years?

Solution:

Initial value of the machine, $P=$ Rs 625000

Rate of depreciation, $R=8 \%$

Time, $n=2$ years

Then the value of the machine after two years is given by

Value $=P \times\left(1-\frac{R}{100}\right)^{n}$

$=$ Rs $625000 \times\left(1-\frac{8}{100}\right)^{2}$

$=$ Rs $625000 \times\left(\frac{100-8}{100}\right)^{2}$

$=$ Rs $625000 \times\left(\frac{92}{100}\right)^{2}$

$=$ Rs $625000 \times\left(\frac{23}{25}\right)^{2}$

$=$ Rs $625000 \times\left(\frac{23}{25}\right) \times\left(\frac{23}{25}\right)$

$=$ Rs $(1000 \times 23 \times 23)$

$=$ Rs 529000

Therefore, the value of the machine after two years will be Rs. 529000 .

Leave a comment

Close
faculty

Click here to get exam-ready with eSaral

For making your preparation journey smoother of JEE, NEET and Class 8 to 10, grab our app now.

Download Now