Question

12) The value of a machine reduces by 20% every year. If the present value is 15,000, what will its value be 2 years later?​

Answer 1

If the value of the machine reduces by 20% every year, then its value at the end of each year is 80% of its value at the beginning of the year.

So, after 1 year, the value of the machine will be:

15000 x 0.8 = 12000

After 2 years, the value of the machine will be:

12000 x 0.8 = 9600

Therefore, the value of the machine 2 years later will be 9600.