Question

Mr. Cherian purchased a boat for Rs. 16000. If the total cost of the boat is depreciating at the rate of $5\%$ per annum, calculate its value after 2 years.

Answer 1

Cost of boat = Rs. 16000
Rate of depreciating $=5\%$ p.a.
Period = 2 years.
$\therefore$ Value of boat after 2 years
$=Rs.16000{(1-\frac{5}{100})}^2$
$=Rs.16000{\left(\frac{19}{20}\right)}^2$
$=Rs.16000\times \frac{19}{20}\times \frac{19}{20}=Rs.14440$