Question

Present Value of a printing machine is Rs 1,80,000 (Indian Currency, 1 Rs = 100 paisa) Value of the machine depreciated at the rate of the machine after 34 years?

I am puzzled because of this 34 years!!!!!!!!!!!!!!!!

Answer 1

Just follow following steps.

Explanation:

No need to be puzzled.

Just think that Present Value is `P`

and discounted value `D` after discounting say at `r%` after `n` years will be given by

`D=P(1-r/100)^n`

You have not given rate of depreciation `r` but let `r=10%` and years are `34`

`D=P(1-10/100)^34=Pxx(9/10)^34=Pxx(0.9)^34`

You can use a scientific calculator to calculate this.

Just use function `x^y` and for this first enter `0.9` then click at `x^y` and then `34` and you get

`0.02781283894436935112572857762318`

Multiply it by `P=180000` and you get

discounted value as `Rs.5006.31`

If `r` is different you can calculate it accordingly.