Question

The value of a machine depreciates every year by 5 %. If the present value of the machine be Rs. 100,000, what will be its value after two years?

• A. Rs. 100, 050
• B. Rs. 90,250
• C. Rs. 99,250
• D. None

Answer 1

The correct option is B Rs. 90,250

Initial value of machine $=100000$

$5\%$ decreased in first year $=100000-100000\times \frac{5}{100}=95000$

Again, $5\%$ decreased in second year $=95000-95000\times \frac{5}{100}=90250$