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The Value of a Machine Depreciates at the Rate of 10% per Annum. It Was Purchased 3 Years Ago. If Its Present Value is Rs 43740, Find Its Purchase Price.

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Question

The value of a machine depreciates at the rate of 10% per annum. It was purchased 3 years ago. If its present value is Rs 43740, find its purchase price.

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Solution

Purchase price = P \[\left( 1 - \frac{R}{100} \right)^{- n} \]
\[ \Rightarrow 43, 740 \left( 1 - \frac{10}{100} \right)^{- 3} \]
\[ = 43, 740 \left( 0 . 90 \right)^{- 3} \]
\[ = 60, 000\]
Thus, the purchase price of the machine was Rs 60, 000.

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