Question

the value of a machine depreciates at the rate of 20% p. a. compound depreciation find the total compound depreciation after 3 yrs if the present value is Rs. 175000​

Answer 1

Answer:

R 85400

Explanation:

The amount of depreciation will be the current amount minus the amount after three years.

amount after threes is calculated as follow

A= P x( 1+ r) ^n

Wheres A: amount after 3 years

P : principal amount =r 175,000; r = -20%, n is number of period

A = 175,000 x ( 1- 0.2)^3

A =175,000 x(0.8)^3

A = 175,000 x 0.512

A=89,600

Depreciation =175,000 - 89,600

=R 85400