Question

The cost price of a machine is $2,50,000$. If the rate of depreciation is $10\%$ per year find the depreciation in price of the machine after two years.

Answer 1

Here, $P=$ Cost price of the machine $=2,50,000$
$A=$ Cost price after $2$ years
$I=$ Depreciation in price after $2$ years
$R=$ Rate of depreciation $=10\%$
$N=2$ years

$A=P(1-\frac{R}{100}{)}^N$

$=250000\left(\right(1-\frac{10}{100}{)}^2$

$=250000\left(\right(1-\frac{1}{10}{)}^2$

$=250000\left(\right(\frac{9}{10}{)}^2$

$=2500\times 81$

$=2,02,500$

Thus, $I=250000-2,02,500=Rs.47500$