A machine is purchased for ₹80,000. Its value depreciates at the rate of 10% per year. What will be its value after 3 years?
Show answer & explanation
Correct answer: B
Explanation
Given:
Value = ₹80,000
Depreciation = 10% per annum
Time = 3 years
By the formula:
A = P(1 − r/100)ᵗ
A = 80,000(1 − 10/100)³
= 80,000(0.9)³
= 80,000 × 0.729
= ₹58,320