Question

The value of a machine depreciates at the rate of 10% per annum. It was purchased 3 years ago. If its present value is Rs 43740, find its purchase price.

Answer 1

$$\begin{gathered} \mathrm{Purchase}\mathrm{price}=\mathrm{P}{\left(1-\frac{\mathrm{R}}{100}\right)}^{-\mathrm{n}} \\ \Rightarrow 43,740{\left(1-\frac{10}{100}\right)}^{-3} \\ =43,740{\left(0.90\right)}^{-3} \\ =60,000 \\ \mathrm{Thus},\mathrm{the}\mathrm{purchase}\mathrm{price}\mathrm{of}\mathrm{the}\mathrm{machine}\mathrm{was}\mathrm{Rs}60,000. \end{gathered}$$