Question

The value of a machine depreciates at the rate of 10% per annum. What will be its value 2 years hence, if the present value is Rs 100000? Also, find the total depreciation during this period.

Answer 1

Given, 

Present value of machine = Rs.100000 

Rate of depreciation = 10% per annum 

So, 

Value of machine after 2 years \(= 100000({1}-\frac{10}{100})({1}-\frac{10}{100})\)

\(= 100000\times\frac{9}{10}\times\frac{9}{10}\) = Rs. 8100

Total depreciation during this period = Rs.(100000 – 8100) = Rs.19000