Question

A machine for making tablets is bought at a price of Rs.7,50,000 depreciates at the rate of 22% each year. What will be the value of the machine at the end of three years? By how much will it depreciate in three years?

Answer 1

Hint: Initial price of the machine is given to us. But as the time passes the rate of the machine depreciates by 22% each year. This continuously depreciates each year. We have to calculate the price after three years. We will first depreciate the value by 22% of the original. And this will be calculated two more times. But each time on the depreciated value.

Complete step by step solution:
Given the price of the machinery for making the tablets is Rs.7,50,000.

year	Depreciation	New price of the machine
First year	\[ = 750000 \times \dfrac{{22}}{{100}} \\ = 7500 \times 22 \\ = 165000 \\ \]	\[750000 - 165000 = 585000\]
Second year	\[ = 585000 \times \dfrac{{22}}{{100}} \\ = 5850 \times 22 \\ = 128700 \\ \]	\[585000 - 128700 = 456300\]
Third year	\[ = 456300 \times \dfrac{{22}}{{100}} \\ = 4563 \times 22 \\ = 100386 \\ \]	\[456300 - 100386 = 355914\]

So this is the way of solution. So after three years the value of the machine will be Rs.355914.
So, the correct answer is “Rs.355914.”.

Note: Note that each year the value depreciates by 22%. We have subtracted the depreciated value from the previous value each time. This is done two more times for obtaining the value of the machine after three years. Also note that depreciated value means that should be subtracted from the value before it. And if it is enhanced then we have to add it.