Question:

The value of a machine depreciates at the rate of 10% per annum. It was purchased 3 years ago for Rs 60000. What is the present value of the machine?

(a) Rs 53640

(b) Rs 51680

(c) Rs 43740

(d) Rs 43470

Solution:

(c) Rs. 43740

Here, $A=$ Rs. $P \times\left(1-\frac{R}{100}\right)^{n}$

$=$ Rs. $60000 \times\left(1-\frac{10}{100}\right)^{3}$

$=$ Rs. $60000 \times\left(\frac{90}{100}\right)^{3}$

$=$ Rs. $60000 \times\left(\frac{9}{10}\right) \times\left(\frac{9}{10}\right) \times\left(\frac{9}{10}\right)$

$=$ Rs. $(60 \times 9 \times 9 \times 9)$

$=$ Rs. 43740