Question

Grace Fashion Boutique purchased a sewing machine at Rs.25,000/-. After 3 years machine was sold at a depreciated value Rs.18,225/- Find the rate of depreciation.

Answer 1

Given, purchase price of sewing machine = V = ₹ 25,000/-

Selling price of machine = D.V. = ₹ 18,225/-

Number of years = n = 3 years

By using, D.V. = V`(1 - "r"/100)^"n"`

18,225 = 25,000`(1 - "r"/100)^3`

`(1 - "r"/100)^3 = (18,225)/(25,000) = 729/1000 = (9/10)^3`

`(100 - "r")/100 = 9/10`

∴ 100 – r = 90

∴ r = 10%

∴ The rate of depreciation is 10% per annum.