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The value of a machine depreciates 10% annually. If its present value is Rs. 4000. Its value 2 years later will be?

Rs. 3200
Rs. 3240
Rs. 3260
Rs. 3280

Correct Answer: Rs. 3240

Explanation:

Value of machine 2 years later = Rs. [ 4000 x {(1 - 10)/10)}²]
= Rs. (4000 x 9/10 x 9/10)
= Rs. 3240

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