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.
Answers
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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