Question

By using the formula, find the amount and compound interest on:

A car is purchased for Rs 348000. Its value deprectates 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

$\text{Cost of car = Rs. 348000}\text{Rate of depreciation}\left(R_1\right)=10\%p.a.\text{for first year}\therefore \left(R_2\right)=20\%\text{p.a. for second year}\therefore \text{Value after 2 years}=P(1-\frac{R_1}{100})(1-\frac{R_2}{100})=Rs.348000(1-\frac{10}{100})(1-\frac{20}{100})=Rs.348000\times \frac{9}{10}\times \frac{4}{5}=Rs.250560$