The value of a machine depreciates at the rate of 25% each year. If the difference between its value at the end of the second year and the third year is Rs.24,000, then what is the value (in Rs.) of the machine at the end of the first year?
1. 1,28,000
2. 1,00,000
3. 1,35,000
4. 1,12,000
1. 1,28,000
2. 1,00,000
3. 1,35,000
4. 1,12,000
Correct Answer – Option 1 : 1,28,000
Given:
The value of a machine depreciates at the rate of 25% each year.
Concept Used:
Price after depreciation = Original price × (100 – depreciation %)/100
Calculation:
Let value of the machine at the end of first year be Rs.a
The value of the machine at the end of second year = a × 75/100
The value of the machine at the end of third year = a × 75/100 × 75/100
Accordingly,
a × 75/100 – a × 75/100 × 75/100 = 24000
⇒ a = 128000
∴ The value of machine at the end of first year is Rs.128000.