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Compounding interest annually

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Choose the most appropriate option.
The value of a machine depreciates every year at the rate of $10%$ on its value at the beginning of that year. If the present value of the machine is Rs. $729$, its worth three years ago was?

AnswerClick to flip back
A
Rs. $1,000$
💡 Explanation:

$P\left(1-\dfrac{10}{100}\right)^3=729$


$\Rightarrow$  $P\times\dfrac{90}{100}\times\dfrac{90}{100}\times\dfrac{90}{100}=729$

$\Rightarrow$  $P\times\dfrac{729}{10\times100}=729$

$\Rightarrow$  $P=\dfrac{729\times1000}{729}$

$\Rightarrow$  $P=Rs.1000$ 

$\therefore$  The value of machine $3$ years ago was $Rs.1000$

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