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Q.

The value of a machine depreciates every year by 5%. If the present value of the machine is Rs100000, what will be its value after 2 years?


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a

Rs. 90250

b

Rs. 9050

c

Rs. 9020

d

Rs. 9025 

answer is A.

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Detailed Solution

Given, the value of a machine depreciates every year by 5%.
Present value = Rs.100000
Depreciation rate per year = 5%.
Value after 1st year = 100000 - 5 % of 100000.
We know that a% of b = a100×b where a and b are real numbers.
⇒Value after 1st year = 100000-5100×100000
⇒Value after 1st year = 100000-5000
⇒Value after 1st year = Rs 95000
Value after 2nd year = 95000 - 5% of 95000.
⇒Value after 2nd year = 95000-5100×95000
⇒Value after 2nd year = 95000-4750
⇒Value after 2nd year = Rs 90250
The value of the machine after 2 years will be Rs. 90250 .
Hence, option 1 is correct.
 
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The value of a machine depreciates every year by 5%. If the present value of the machine is Rs100000, what will be its value after 2 years?