Harshit purchased a new motorcycle for rupees 75000 which depreciated every year by 8%.calculate the value of the motorcycle after 3 years of purchase. Also find the total reduction in the value of the motorcycle.
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Value of motor cycle 75000
depreciation rate =8%
book value of motor cycle at end of 1st year under diminishing balance method
75000-(75000×8%) =69000
book value of motor cycle at end of 2nd year
69000-(69000×8%) =63480
book value of motor cycle at end of 3rd year
63480-(63480-8%) =58402
total reduction in value of motor cycle is 75000-58402 =16598
depreciation rate =8%
book value of motor cycle at end of 1st year under diminishing balance method
75000-(75000×8%) =69000
book value of motor cycle at end of 2nd year
69000-(69000×8%) =63480
book value of motor cycle at end of 3rd year
63480-(63480-8%) =58402
total reduction in value of motor cycle is 75000-58402 =16598
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