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The value of a machine depreciates at the rate of 10% every year. It was purchased 3 years ago. If its present value is Rs. 8748, What is its purchase price?
- a)11000
- b)9000
- c)10000
- d)12000
Correct answer is option 'D'. Can you explain this answer?
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The value of a machine depreciates at the rate of 10% every year. It w...
Given data:
Depreciation rate = 10% per year
Number of years since purchase = 3 years
Present value of the machine = Rs. 8748
To find:
Purchase price of the machine
Solution:
Let the purchase price of the machine be denoted by P.
After 1 year, the value of the machine will become 90% (or 0.9 times) of its original value P.
After 2 years, the value of the machine will become 90% of its value after 1 year, which is 0.9 times 0.9 times P, or 0.81P.
After 3 years, the value of the machine will become 90% of its value after 2 years, which is 0.9 times 0.81P, or 0.729P.
Given that the present value of the machine is Rs. 8748, we can write the following equation:
0.729P = 8748
Dividing both sides by 0.729, we get:
P = 12000
Therefore, the purchase price of the machine was Rs. 12000.
Answer: d) 12000
Depreciation rate = 10% per year
Number of years since purchase = 3 years
Present value of the machine = Rs. 8748
To find:
Purchase price of the machine
Solution:
Let the purchase price of the machine be denoted by P.
After 1 year, the value of the machine will become 90% (or 0.9 times) of its original value P.
After 2 years, the value of the machine will become 90% of its value after 1 year, which is 0.9 times 0.9 times P, or 0.81P.
After 3 years, the value of the machine will become 90% of its value after 2 years, which is 0.9 times 0.81P, or 0.729P.
Given that the present value of the machine is Rs. 8748, we can write the following equation:
0.729P = 8748
Dividing both sides by 0.729, we get:
P = 12000
Therefore, the purchase price of the machine was Rs. 12000.
Answer: d) 12000
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Community Answer
The value of a machine depreciates at the rate of 10% every year. It w...
Purchase price = Rs ( 8748/(1- 10/100)3
= Rs. [8748 * (10/9) * (10/9 )* (10/9)]
= Rs.12000
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The value of a machine depreciates at the rate of 10% every year. It was purchased 3 years ago. If its present value is Rs. 8748, What is its purchase price?a)11000b)9000c)10000d)12000Correct answer is option 'D'. Can you explain this answer?
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