Question

The value of machine depreciates each year by 10% after every year .if at the end of 3 year its value is 8748, find the purchase mount

Answer 1

Rate of depreciation = i = 10%

No.of years for which the machine is put to use= n = 3

value of the machine at the end of 3 rd year = F = 8748

F = A ( 1 - i)^n

where A =Purchase Amount/Initial Amount

8748 = A ( 1 - 10/100) ^3

8748 = A ( 1 - 0.1) ^3

8748 = A ( 0.9) ^3

8748 = A(0.729)

8748/0.729 = A

12000 = A = Is the purchase amount/initial Value.......