#### Question

The cost price of a machine is 2,50,000. If the rate of depreciation is 10% per year find the depreciation in price of the machine after two years.

#### Solution

Here, P = Cost price of the machine = 2,50,000

A = Cost price after 2 years

I = Depreciation in price after 2 years

R = Rate of depreciation = 10 %

N = 2 years

A = P `(1 + "R"/100)^"N"`

= 250000 `(1 + (-10)/100)^2`

= 250000 `(1 + 1/10)^2`

= 250000 `(9/10)^2`

= 202500

Also,

I = P − A

= 250000 − 202500

= 47500

Hence, the depreciation in price of the machine after two years is Rs 47,500.

Is there an error in this question or solution?

Solution The Cost Price of a Machine is 2,50,000. If the Rate of Depreciation is 10% per Year Find the Depreciation in Price of the Machine After Two Years. Concept: Application of Formula for Compound Interest.