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Standard VIII
Mathematics
Finding CI When Rate Compounded Anually or Semi - Anually
A machine was...
Question

A machine was purchased for Rs. 10, 000 and its life was estimated to be 3 years, and at the end of its life, its book value was Rs. 5, 120. If depreciation is calculated according to Diminishing Balance Method, the rate of depreciation would be?

A
25%
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B
15%
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C
20%
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D
10%
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Solution

The correct option is B 20%

Calculation of depreciation

Year

Particulars

Details

Amount

I

Value of Machine

10000

Depreciation 20%

(2000)

II

WDV on 2nd year

8000

Depn 20%

1600

III

WDV on 3rd year

6400

Depn 20%

1280

Book value of machine

5120


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