Problems on Depreciation
Problems on Depreciation
It is well known fact that the constant use of any machine or any other article causes wear and tear due to which its value decreases with time.
Depreciation: The relative decrease in the value of a machine over a period of time is called its depreciation.
Rate of Depreciation: Depreciation per unit time is called the rate of depreciation.
Depreciated Value: The value at any time is called the depreciated value.
Formulae for Depreciation:
Formula1: If be the value of an article at a certain time and R% per annum is the rate of depreciation, then the value
at the end of n years is given by
Formula 2: If is the value of an article at certain time and the rate of depreciation is
for first
years,
for next
years and so on and
for the last
years, then the value at the end of
is given by
Illustration: Jack purchased an old scooter for Rs 16000. If the cost of scooter after 2 years depreciates to Rs 14440, find the rate of depreciation
Solution: Let the rate of depreciation be R% per year. Then,
Take square root on both sides, we have
Hence, the rate of depreciation is 5% pr annum.
The cost of a T.V set was quoted Rs 17000 at the beginning of 1999. In the beginning of 2000 the price was hiked by 5%. Because of decrease in demand the cost was reduced by 4% in the beginning of 2001. What is the cost of the T.V. set in 2001? | |||
| Right Option : A | |||
| View Explanation | |||
A new car costs Rs 360000. Its price depreciates at the rate of 10% a year during the first two years and at the rate of 20 % a year thereafter . What will be the price of the car after 3 years? | |||
| Right Option : C | |||
| View Explanation | |||
The present price of a scooter is Rs 8000. If its value decreases every year by 10%, then find its value before 3 years. | |||
| Right Option : B | |||
| View Explanation | |||
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