Question

The cost of a machine depreciated by Rs 4000 during the first year and by Rs 3600

during the second year. Calculate:

i) The rate of depreciation

ii) The original cost of the machine

iii) The cost at the end of the third year.​

Answer 1

Answer:

1)10%

2)Rs.40000

3)Rs.29160

Step-by-step explanation:

1) Difference between depreciation of 1st year and 2nd year=4000−3600=Rs.400

Rate of depreciation = (400*100 )/4000= 10%

2) Let the original cost of the machine be Rs100

∴Value after one year=Rs.100−10% of 100=100− ( 10/ 100 ) ×100=Rs.90

Depreciation during second year=10%  of 90=  (10 /100)  ×90=Rs.9

When depreciation during second year is Rs. 9 then original cost=Rs.100

When Depreciation during the second year is Rs.3600 then original cost  =(100 /9 )×3600=Rs.40000  

3) Cost of the machine after one year=40000−4000=Rs.36000

Cost of the machine after second year=36000−3600=Rs.32400

Depreciation in third year=10%of 32400=  (10/ 100 )×32400=Rs.3240

Cost of the machine after third year=32400−3240=Rs.29160

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