 Hello and welcome to the session. In this session, we are going to discuss the following question and the question says that the present price of a machine is $529. If its value decreases every year by 8%, then what was its value two years ago? The compound interest formula is a is equal to p into 1 plus r upon 100 raise to power n. The value of the growth factor is 1 plus r upon 100 and the value of decay factor is 1 minus r upon 100. With this key idea, let us proceed with the solution. According to the question, we are given the present price of a machine is $529 and its value decreases every year by 8%. We have to find the value of the machine two years ago. Let the value of the machine years ago be p. The value of the machine has decreased every year in two years. So, the time n is equal to two years. So, we shall use the compound interest formula using the decay factor where the decrease rate r is equal to 8% per annum. So, using the formula, the present value of the machine will be p into 1 minus 8 upon 100 raise to power 2 dollars. Given that the present value of the machine is equal to $529, so $529 is equal to p into 1 minus 8 upon 100 raise to power 2, which implies p into 100 minus 8 upon 100 raise to power 2 is equal to $529. This implies p into 92 upon 100 raise to power 2 is equal to $529. Now, 4 into 25 is 100 and 4 into 23 is 92. So, this becomes p into 23 upon 25 square is equal to $529, which can be written as p into 23 upon 25 into 23 upon 25 is equal to $529. This implies p is equal to $529 into 25 into 25 upon 23 into 23. Now, 23 into 23 is $529, so p is equal to $25 into 25, which is equal to $625. So, the value of the machine 2 years ago was $625, which is our answer. This completes our session. Hope you enjoyed the session.