Question

compound interest
Q). During every financial year,the value of a machine decreases by 12%. Find the original cost of a machine which cost decreases by Rs.2640 during second financial year of its purchase.

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Answer 1

say X is the original cost of machine. It decreases 12% every year, so after completion of 1 year machine cost is X- 0.12x ( 12% of X ) = 0.88 X and after completion of second year machine cost is 0.88X - 0.1056X ( 12% of 0.88X ) = 0.7744X

0.7744X = 2640
X = 2640/ o.7744= 3409 Rs