Question:
The value of a machine depreciates every year by 20%. If the present value of the machine be Rs 160000, what was its value last year?
Solution:
Let Rs $x$ be the value of the machine last year.
Then, present value $=80 \%$ of $\operatorname{Rs} x$
$=\operatorname{Rs}\left(x \times \frac{80}{100}\right)$
$=\operatorname{Rs} \frac{4 x}{5}$
Now, $\frac{4 \mathrm{x}}{5}=160000$
$\Rightarrow \mathrm{x}=\left(160000 \times \frac{5}{4}\right)$
$\Rightarrow \mathrm{x}=40000 \times 5=200000$
Hence, the value of the machine last year was Rs $2,00,000$.