Question 15 Marks
The cost of a car purchased 2 years ago, depreciates at the rate of 20 % every year. If its present worth is ₹315600, find:
i. its purchase price
ii. its value after 3 years.
i. its purchase price
ii. its value after 3 years.
Answer
View full question & answer→It is given that,
Present value of car $=315600$
Rate of depreciation $( r )=20 \%$
i. We know that
Value of car 2 years ago $= A \div\left(1-\frac{r}{100}\right)^n$
Substituting the values
$
=315600 \div\left(1-\frac{20}{100}\right)^2
$
By further calculation
$
\begin{array}{l}
=315600 \times \frac{5}{4} \times \frac{5}{4} \\
=493125
\end{array}
$
ii. We know that
Value of car after 3 years $=315600 \times\left(1-\frac{20}{100}\right)^3$
By further calculation
$
\begin{array}{l}
=315600 \times \frac{4}{5} \times \frac{4}{5} \times \frac{4}{5} \\
=161587.20
\end{array}
$
Present value of car $=315600$
Rate of depreciation $( r )=20 \%$
i. We know that
Value of car 2 years ago $= A \div\left(1-\frac{r}{100}\right)^n$
Substituting the values
$
=315600 \div\left(1-\frac{20}{100}\right)^2
$
By further calculation
$
\begin{array}{l}
=315600 \times \frac{5}{4} \times \frac{5}{4} \\
=493125
\end{array}
$
ii. We know that
Value of car after 3 years $=315600 \times\left(1-\frac{20}{100}\right)^3$
By further calculation
$
\begin{array}{l}
=315600 \times \frac{4}{5} \times \frac{4}{5} \times \frac{4}{5} \\
=161587.20
\end{array}
$