A machine valued at N20,000 depreciates by 10% every year. What will be the value of the machine at the end of two years?
-
A.
N16,200 -
B.
N1,4,200 -
C.
12,000 -
D.
8000.
Correct Answer: Option A
Explanation
D = P(I – (frac{R}{100}))n where P = N20,000; R = 10%, n = 2
D = 20,000(I – (frac{10}{100}))2
= 20000(0.9)2
20,000 x 0.81 = N16,200