The value of a machine depreciates every year by 5%. If the present value of the machine is ₹80,000, what will be its value after 2 years?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. ₹72,200.
Let the value of machine after two years be x
Now, according to the question
⇒ 80000 × (100 - 5)/100 × (100 - 5)/100 = x
⇒ 80000 × 95/100 × 95/100 = x
⇒ 8 × 95 × 95 = x
⇒ x = 72200
Thus, the value of the machine after 2 years will be ₹72,200