The value of a machine depreciates at the rate of 8% per annum. If the value of the machine is now 75000, what will be its value after 3 years?
a.2316
b.11546.70
c.5029.45
d.58401.60
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3
Answer:
d) 58401.60
Step-by-step explanation:
present value of machine = 75000 (p)
rate of depreciation per annum = 8% (r)
tenure = 3 years (t)
therefore following the method of compound interest =
Amount = p(1- r/100)^3
{note: "-" minus sing is taken as we have to find out depreciated amount }
therefore ,
= 75000(1- 8/100)^3
= 75000(1-0.08)^3. {8/100= 0.08}
= 75000(0.98)^3. {1-0.08= 0.98}
= 75000x 0.98x0.98x0.98
= 58401.60 as answer
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