Question

A machine costing rupees 240000 is depreciate at 18%per annum on reducing balance method. find the value of the machine after 6years .Also find the value of the machine after 6years. Also find the depreciation amount for the 6th year.​

Answer 1

Given:

A machine costing rupees 240000 is depreciated at 18%per annum on reducing balance method.

To find:

find the value of the machine after 6years. Also, find the depreciation amount for the 6th year.​

Solution:

Machine costs = Rs 240000

Depreciate percentage =18%

First-year:

=> 240000 x 18/100 = 43200

=> 240000 - 43200 = 196800

Second-year:

=> 196800 x 18/100 = 35424

=> 196800 - 35424 = 161376

Third-year:

=> 161376 x 18/100 = 29047.68 ( Rounded to 29048)

=> 161376 - 29048 = 132328

Fourth-year:

=> 132328 x 18/100 = 23819.04 (Rounded to 23819)

=> 132328 - 23819 = 108509

Fifth-year:

=> 108509 x 18/100 = 19531.62 (Rounded to 19532)

=> 108509 - 19532 = 88977

Sixth-year:

=> 88977 x 18/100 = 16015.86 (Rounded to 16016)

=> 88977 - 16016 = 72961

Hence, the value of the machine after 6 years is Rs 72,961

The depreciation amount for the 6th year is Rs 16016

Answer 2

Given:

• Cost of the machine = Rs. 240000
• Rate of depreciation = 18% per annum
• Time = 6 years

To find:

• The value of the machine after 6 years
• The depreciation amount for the 6th year

Solution:

RULE:

We must remember that when an amount P is depreciated at a rate of r% per annum for n years, then its cost after n years is given by

• $P\times (1-\frac{r}{100})^{n}$

Cost of the machine after 6 years:

Here, P = 240000, r = 18 and n = 6

Then the cost of the machine after 6 years be

• Rs. $240000\times (1-\frac{18}{100})^{6}$
• = Rs. $240000\times (\frac{82}{100})^{6}$
• = Rs. 72961.60

Cost of the machine after 5 years:

Here, P = 240000, r = 18 and n = 5

Then the cost of the machine after 5 years be

• Rs. $240000\times (1-\frac{18}{100})^{5}$
• = Rs. $240000\times (\frac{82}{100})^{5}$
• = Rs. 88977.60

Depreciation amount for the 6th year:

• In order to find the depreciation amount for the 6th year, we subtract the cost of the machine after 6 year from the cost of the machine after 5 years.

• Thus the depreciation amount for the 6th year
• = Rs. (88977.60 - 72961.60)
• = Rs. 16016

Answer:

• The value of the machine after 6 years is Rs. 72961.60 .
• The depreciation amount for the 6th year is Rs. 16016 .