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Question
The present value of a machine is ₹ 16800. It depreciates at 25% p.a. Its worth after 2 years is ₹ 9450
Options
True
False
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Solution
True
Explanation;
Hint:
Present value of machine = ₹ 16800
Depreciation rate (n) = 25%
Value after 2 years = `"P"(1 - "r"/100)^"n"`
= `16800(1 - 25/100)^2`
= `16800 xx (1 - 1/4)^2`
= `16800 xx 3/4 xx 3/4`
= 9450
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