Question

The cost of a machine deprecated by 4,000 during the year and by 3600 the second year. Calculate (1) the rate of description (2) the original cost of machine and cost at the end of third year

Answer 1

(1) The rate of depreciation for the first year =Rs 4000
and after the second year= Rs 3600
Therefore, difference in depreciation between two year =4000-3600 = 400 Rs

Therefore Rs 400 is depreciation on Rs 4000 for first year

Therefore Rate = I×100 over P× T
400×100 over 4000× 1 = 10%

The original price of the machine
Depreciation = rs 4000
Rate = 10%
time = 1 year
P= I×100 over R×T
4000×100 over 10×1 = rs 40000

(3)

(2)
amount of machine at the end of third year
P ( 1- r over 100)
= rs 40000 ( 1- 10 over 100) raise to the power 3
= 40000 ×9 over 10 × 9 over 10 × 9 over 10
rs 29160 ans