Question

The value of a machine depriciates at the rate of 10% per annum. If its present value is Rs 10000, what will be its value after 2 years?

Answer 1

The present value of the machine = Rs 10000
The decrease in its value after the 1^st year = 10% of Rs 10000
= Rs $\left(\frac{10}{100}\times 10000\right)$ = Rs 1000
The depreciated value of the machine after the 1^st year = Rs (10000 − 1000) =Rs 9000
The decrease in its value after the 2^nd year = 10% of Rs 9000
= Rs $\left(\frac{10}{100}\times 9000\right)$ = Rs 900
The depreciated value of the machine after the 2^nd year = Rs (9000 − 900) = Rs 8100

Hence, the value of the machine after two years will be Rs 8100.