Question

A car is purchased for Rs 348000. Its value depreciates at 10% per annum during the first year and at 20% per annum during the second year. What will be its value after 2 years?

Answer 1

Initial value of the car, P= Rs 348000
Rate of depreciation for the first year, p= 10%
Rate of depreciation for the second year, q= 20%
Time, n = 2 years.
Then the value of the car after two years is given by Value =$P\times (1-\frac{p}{100})\times (1-\frac{q}{100})$
=Rs.$348000\times (1-\frac{10}{100})\times (1-\frac{20}{100})$
=Rs.$348000\times (1-\frac{1}{10}\times (1-\frac{1}{5})$
=Rs.$348000\times \frac{10-1}{10}\times \frac{5-1}{5}$
=Rs.$(348000\times (\frac{9}{10})\times \frac{4}{5}$
=Rs.$6960\times 9\times 4$
=Rs. 250560
∴ The value of the car after two years is Rs 250560.