Question

The cost of a machine depreciated by Rs 2592 during the third year and by Rs 2332.80 during the fourth year. Calculate :

The original cost. 

Answer 1

Depreciation for seoond year = Rs 2,592 + 10 % of Rs 2,592 

Here, 10 % of Rs 2,592 =Rs 259.20 

Hence, Depreciation for seoond year

= Rs 2,592 +Rs 259.20 =Rs 2,851.20 

Depreciation for first year = Rs 2,851.20 + 10 % of Rs 2,851.20 

Here, 10 % of Rs 2,851.20 = Rs 285.12 

Hence, Depreciation for first year

= Rs 2,851.20 + Rs 285.12 = Rs 3, 136.32

Total depreciation for 4 years

= Rs (3, 136.32 + 2,851.20 + 2,592 + 2,332.80)

=Rs 10,912.32 

A= P - Rs 10,912.32 ;  P =  x 

`"A" = "P" (1 + "r"/100)^"n"`

`"x" - 10912.32 = "x" (1 - 10/100)^4`

`"x" - 10912.32 = "x"  xx 1.1 xx 1.1 xx 1.1 xx 1.1`

x (1 - 0.6561) = Rs 10912.32 

`"x" = "Rs"  10912.32/0.3439`

X=RS 31731.08 

⇒ x = Rs 32,000 (approx) 

Original cost= Rs 32,000