Question

A machine is purchased for 770000. Its value depreciatesat the rate of 5% per annum. What will be the vaue after 2 yrs

Answer 1

1.Written Down Value Method

machine amount is rs. 770000.

and depreciation rate is 5℅

In first year 770000×5℅ = rs.38500

770000-38500=731500

In second year dep. charged @of 5℅ 731500×5℅=36575

then 731500-36575= rs.694925

so the value of machine after 2 year is rs.694925

2 .Straight line method

amount of machine is rs.770000

dep.is charged @5℅

In first year 770000×5℅= 38500

in sec.year 770000 ×5℅= 38500

In straight line method the value of of depreciation is same as the evry year

So the value of machine after 2 year is same 770000.