Question:
The value of a machine depreciates at the rate of 10% per annum. What will be its value 2 years hence, if the present value is Rs 100000? Also, find the total depreciation during this period.
Solution:
Value of the machine after two years $=\mathrm{P}\left(1-\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}$
$\Rightarrow 100,000\left(1-\frac{10}{100}\right)^{2}$
$=100,000(0.90)^{2}$
$=81,000$
Thus, the value of the machine after two years will be Rs 81,000 .
Depreciation $=$ Rs $100,000-$ Rs 81,000
$=\operatorname{Rs} 19,000$