A machine was purchased 2 years ago. Its value decreases by 10 % every year. Its present value is ₹ 97200. Find the purchase price of the machine
₹ 1,20,000
Given Present value of the machine ₹ 97200, Rate = 10 % and n = 2 years
The present value of the machine = Value of the machine 2 years ago (1−r100)2
97200 = P (1−10100)2
97200 = P(90100)2
P = 97200×10×109×9
= ₹ 120000