Question

4 Chiranjeev purchased a machine worth 16,000. If the cost of the machine is depreciating at the rate of 5%pa, calculate its value afer 2 years​

Answer 1

Answer:

We have,

Price of a boat is = Rs 16000

Depreciation rate = 5% per annum

By using the formula,

A = P (1 + R/100)t

Substituting the values, we have

= P (1 + R/100)2

Since it is depreciation we use P (1 – R/100)n

= 16000 (1 – 5/100) (1 – 5/100)

= 16000 (95/100) (95/100)

= 16000 (0.95) (0.95)

= 14440

Therefore,

Value of the boat after two years is Rs 14440.