Question

The value of a machine depreciates at the rate of 10% per annum. It was purchased 3 years ago. If its present value is Rs.291600, for how much was it purchased?

Answer 1

The machine was purchased for approximately Rs.218632.34.

Step-by-step explanation:

To find the original purchase price of the machine, we need to calculate the present value based on the depreciation rate and the number of years it has been owned. We can use the formula: Present Value = Future Value / (1 + Depreciation Rate)^n, where Depreciation Rate = 0.10 (10%) and n = 3 years.

Substituting the given values into the formula, we have: Present Value = Rs.291600 / (1 + 0.10)^3 = Rs.291600 / 1.331 = Rs.218632.34.

So, the machine was purchased for Rs.218632.34 (approximately).