Mathematics of FinanceMCQPYQ June 24Question 1263 of 512
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The value of a machine depreciates every year at the rate of 10%\displaystyle 10\% per annum, on its value at the beginning of that year, if the present value of the machine is 72,900\displaystyle 72,900, then machine's worth 3\displaystyle 3 years ago was:

Options

A80,000\displaystyle 80,000
B94,710\displaystyle 94,710
C1,00,000\displaystyle 1,00,000
D75,087\displaystyle 75,087
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Correct Answer

Option c1,00,000\displaystyle 1,00,000

All Options:

  • A80,000\displaystyle 80,000
  • B94,710\displaystyle 94,710
  • C1,00,000\displaystyle 1,00,000
  • D75,087\displaystyle 75,087

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Detailed Solution & Explanation

**Derivation of Original Value (3 Years Ago)** Given: - Present Value (Vt\displaystyle V_t) = Rs. 72,900\displaystyle \text{Rs. }72,900 - Rate of Depreciation (d\displaystyle d) = 10%\displaystyle 10\% per annum - Time (t\displaystyle t) = 3\displaystyle 3 years **Step 1: Set up the depreciation formula** Vt=V0(1d)tV_t = V_0(1 - d)^t 72900=V0(10.10)372900 = V_0(1 - 0.10)^3 72900=V0(0.9)372900 = V_0(0.9)^3 72900=0.729V072900 = 0.729 V_0 **Step 2: Solve for V0\displaystyle V_0** V0=729000.729=Rs. 1,00,000V_0 = \frac{72900}{0.729} = \text{Rs. }1,00,000 Hence, **Option C** is the correct answer.

About This Chapter: Mathematics of Finance

Paper

Paper 3: Quantitative Aptitude

Weightage

12-16 Marks

Key Topics

Simple & Compound Interest, Annuity, Perpetuity

The most important mathematical chapter in the entire syllabus. It covers Simple Interest (SI), Compound Interest (CI), Nominal vs Effective rates, Present and Future Value, Annuities (Ordinary and Due), Sinking Funds, and Perpetuities. The concepts learned here are applied heavily in CA Intermediate and Final.

View Official ICAI Syllabus

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