Question

the value of machine depreciates every year by 5%. If the present value of the machine is 100000,what will be its value after 2 years.

Answer 1

The answer would be $90,250

Answer 2

It starts out being worth $100,000 (One hundred thousand dollars). Every year it depreciates by 5% (0.05). What is the value after two years? We can find this by multiplying.

100,000 * 0.05 = 5,000
100,000 - 5,000 = 95,000

95,000 * 0.05 = 4,750
95,000 - 4,750 = 90,250

The machine, after two years, will be worth $90,250.