Mathematics
The cost of a machine is supposed to depreciate each year by 12% of its value at the beginning of the year. If the machine is valued at ₹ 44,000 at the beginning of 2008, find its value :
(i) at the end of 2009.
(ii) at the beginning of 2007.
Compound Interest
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Answer
(i) For depreciation :
Value after n years = Present value
The cost of machine depreciates at the beginning of the next year, or we can say that at end of each year.
So, Value at end of 2009 = Value at beginning of 2010.
Hence, value at the end of 2009 = ₹ 34073.60
(ii) Let value at beginning of 2007 be ₹ x.
After one year it becomes ₹ 44000.
For depreciation :
Value after n years = Present value
Substituting values we get :
Hence, value at beginning of 2007 = ₹ 50000.
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