The cost of a car purchased 2 years ago, depreciates at the rate of 20% every year. If it's present worth is RS.315600, find it's value after 4 years.

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Solution

Solution-: 1st we will find the value of original price of car.
Here, V = present value = Rs315600, t = 2 years, r = 20%,
V₀ = Original price = ?
Using V = V₀(1 – r /100)ⁿ,
315600 = V₀ (1 – 20/100)²
or, 315600 = V₀ (80/100)2 = V₀ (4×4) (5×5) =V0(16/25)
or, V₀ = 315600×25/16 = Rs.493125.
Again we will apply same formula.
Now we have V₀ = Rs.493125, V = value after 4 years, t = 4years, n = 4, r = 20%.
Using, V = V0(1 – r /100)^n
V = 493125 (1 – 20/100)^4
= 493125 (80/100)4
= 493125 (256/625)
= Rs.201884 Answer..

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