» » » A machine valued at ₦20, 000 depreciates by 10% every year. What will be the v...

# A machine valued at ₦20, 000 depreciates by 10% every year. What will be the v...

### Question

A machine valued at ₦20, 000 depreciates by 10% every year. What will be the value of the machine at the end of two years?

### Options

A)
₦16, 200
B)
₦14, 000
C)
₦12, 000
D)
₦16, 000

The correct answer is A.

## Discussion (4)

• In the first year the value of the machine depreciates by
#20,000*10%=#2,000
At the end of the first year,the value of the machine will be
#20,000-#2000=#18,000
In the second year, the value of the machine depreciates by
#18,000*10%=#1,800
At the end of the second year, the value of the machine will be
#18,000-#1,800=#16,200

• In the first year the value depreciates by
#20,000*10%=#2,000
At the end of the first year,the value of the machine will be
#20,000-#2000=#18,000
In the second year, the value of the machine depreciates by
#18,000*10%=#1,800
At the end of the second year, the value of the machine will be
#18,000-#1,800=#16,200

• Promise

Machine is valued at #20000
Depreciates by 10% of the value (#20000) every year =20000/10=2000#
So the machine value depreciates by #2000 every year
So therefore two years depreciation would be #2000x2=#4000 minus the initial value (i.e ) #20000_#4000=#16000