Question

The value of a machine depreciated by 10% per year during the first two years and 15% per year during the third year. Express the total depreciation of the machine, as percent, during the three years.

Answer 1

Let the value of the machine in the beginning = Rs. 100

For 1^st year depreciation = 10% of Rs. 100 = Rs. 10
Value of machine for second year = 100 - 10 = Rs. 90

For 2^nd year depreciation = 10% of 90 = Rs. 9
Value of machine for third year = 90 - 9 = Rs. 81

For 3^rd year depreciation = 15% of 81 = Rs. 12.15
Value of machine at the end of third year = 81 - 12.15 = Rs. 68.85

Net depreciation = Rs. 100 - Rs. 68.85 = Rs. 31.15 or 31.15%.