Question

During every financial year, the value of a machine depreciates by 10%. Find the original value (cost) of a machine which depreciates by Rs. 2,250 during the second year.

Answer 1

Let the original cost of the machine = Rs. 100
$\therefore$ Depreciation during 1st year $=$ 10% of Rs. 100 $=$Rs. 10
value of the machine at the beginning of 2nd year $=Rs.100-Rs.10=Rs.90$
$\therefore$ Depreciation during 2nd year $=10$
Now, when depreciation during 2nd year $=$ Rs. 9, original cost $=Rs.100$
$\Rightarrow$ when depreciation during 2nd year $=Rs.2,250,$
original cost $=Rs.\frac{100}{9}\times 2,250=RS.25,000$ Ans.