Question

Naman purchased an old bike for Rs. $20000$. If the cost of his bike is depreciated at a rate of $5\%$ per annum, then find the cost of the bike after $2$ years?

• A. Rs. $18050$
• B. Rs. $15000$
• C. Rs. $1900$
• D. Rs. $18000$

Answer 1

The correct option is A Rs. $18050$

Initial price of bike is Rs. $20000$, time $=2$ years, rate od depreciation $=5\%$

Cost of bike after $2$ years $=$ initial price of bike $\times {(1-\frac{\text{rate of depreciation}}{100})}^{\text{time}}$

Therefore, cost of bike after $2$ years $=20000{(1-\frac{5}{100})}^2$

$=20000{\left(\frac{19}{20}\right)}^2$

$=18050$

Thus, cost of bike after $2$ years is Rs. $18050$.