Question

The value of a machine depreciates at the rate of 10% per annum. It was purchased 3 years ago. If its present value is Rs 43740, find its purchase price.

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Answer 1

Given

• present value of the machine : Rs 43,740
• Rate of depreciation per annum : 10%

To find

• Purchase value of the machine ( 3 years before )

Let the purchase value be P,

ATQ,

P -3 x 0.1P = Rs 43,740

P-0.3P = Rs 43,740

0.7P = Rs 43,740

P = Rs 43,740/0.7

P = Rs 62,486 (approx)

Hence, the purchase value of the machine would be Rs 62,486