Question

The machinery of a factory was valued at ₹ 18,400 at the end of 2018. If it depreciated at 8% of the value at the beginning of the year, calculate its value at the end of 2017 and 2019.

Answer 1

Given:

Original value at the time of buying, P = ₹ 18400

Rate of depreciation, r = 8%

Number of years, n = 1

Value of an article after n years = `P(1 - r/100)^n`, where P is the original value at the time of buying, r is the rate of depreciation and n is the number of years.

Value of the machine after 1 years = `18400(1 - 8/100)^1`

= `18400(1 - 2/25)`

= `18400(23/25)`

= 16928

Number of years at 2017 = 1

Present value = Value of an article n years ago `(1 - r/100)^n`, where r is the rate of depreciation and n is the number of years.

∴ `x(1 - 8/100)^1 = 18400`

⇒ `x(23/25) = 18400`

⇒ `x = 18400 xx 25/23`

⇒ `x = 20000`

Hence, the value of the machine was ₹ 20,000 in 2017, and its value was ₹ 16,928 at the end of 2019.