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The value of a machine depreciates at the rate of 10%, 12% and 15% at the end of the first year, second year and third year on its value of the beginning of that year. If the present value of the machine is Rs. 5800, what will be its value at the end of 3 years, nearest to the whole rupee?

The value of a machine depreciates at the rate of 10%, 12% and 15% at the end of the first year, second year and third year on its value of the beginning of that year. If the present value of the machine is Rs. 5800, what will be its value at the end of 3 years, nearest to the whole rupee? Correct Answer Rs. 3905

Given:

The present value of the machine is Rs. 5800

1st year depreciate value = 10%

2nd year depreciate value = 12%

3rd year depreciate value = 15%

Formula used:

Decreased value = Initial value × (100 - decrease%)/100

Calculation:

Value of machine after 1 year

5800 × 90/100 = Rs. 5220

Value of machine after 2 year

5220 × 88/100 = Rs.4593.6

Value of machine after 3 year

4593.6 × 85/100 = Rs. 3904.56 ≈ Rs. 3905

∴ The value of the machine after 3 years is Rs. 3905

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