Question

A scooter was bought in April 2005 for Rs 42,000. If its value falls by 10% every year, what will be its value in April 2007?

Answer 1

Price of the scooter, P = Rs 42,000
Rate (R) = −10% p.a.
Number of years (N) = 2 years
Depreciated amount$=\mathrm{P}{\left(1+\frac{\mathrm{R}}{100}\right)}^{\mathrm{N}}$
$$\begin{gathered} =42000{\left(1+\frac{-10}{100}\right)}^2 \\ =42000{\left(1-\frac{1}{10}\right)}^2 \\ =42000{\left(\frac{9}{10}\right)}^2 \\ =42000\times \frac{9}{10}\times \frac{9}{10} \\ =\mathrm{Rs}34020 \end{gathered}$$