Question 7

The value of a machine depreciates at the rate of 20% per annum. If its present value is Rs 96000, then what was the value (in Rs) of the machine 2 years ago?

Solution

Present value of machine = Rs. 96,000 and depreciation rate = 20%

=> Value of machine 1 year ago = $$\frac{96000}{(100-20)}\times100$$

= $$1200\times100=Rs.$$ $$120,000$$

Similarly, value of machine 2 years ago = $$\frac{120,000}{(100-20)}\times100$$

= $$1500\times100=Rs.$$ $$150,000$$

=> Ans - (C)

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