A car is worth ₹5,00,000. Its value depreciates 20% every year, then find its value after 3 years.

₹3,20,000

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₹3,00,000

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₹3,40,000

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₹2,56,000

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Solution

The correct option is D
₹2,56,000

Present value of the car ( $P_{o}$ ) = ₹5,00,000
Rate of depreciation = 20%
By formula,
$P_{n}$ = $P_{o}$ $(1 - \frac{R}{100})^{n}$
Value of car after 3 years = $5, 00, 000$
$\times$ $(1 - \frac{20}{100})^{3}$
= 5,00,000 $\times$ $(1 - \frac{1}{5})^{3}$
= 5,00,000 $\times$ $(\frac{4}{5})^{3}$
= ₹2,56,000

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A car is worth ₹5,00,000. Its value depreciates 20% every year, then find its value after 3 years.

The correct option is D ₹2,56,000 Present value of the car (Po) = ₹5,00,000 Rate of depreciation = 20% By formula, Pn = Po(1−R100)n Value of car after 3 years = 5,00,000 × (1−20100)3 = 5,00,000 × (1−15)3 = 5,00,000 × (45)3 = ₹2,56,000