the value of machine depreciates at 12.5% per annum it was purchased 3 years ago if its present value is 13720 find the original value of the machine 3 years ago
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We can use the formula A = P(1 - R/100)^n
Where
A = present value
P = Value 3 years ago
R = Rate
n = No. of years = 3
13720 = P(1 - 12.5/100)^3
13720 = P(0.875)^3
13720 = 0.67P
P = 13720/0.67
P = 20480
The machine cost 20480 three years ago
Where
A = present value
P = Value 3 years ago
R = Rate
n = No. of years = 3
13720 = P(1 - 12.5/100)^3
13720 = P(0.875)^3
13720 = 0.67P
P = 13720/0.67
P = 20480
The machine cost 20480 three years ago
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