The cost of a vehicle, purchased 4 years ago, depreciates at the rate of 15% every year. If its present worth is ₹ 4,00,000, then find its purchase price.

₹ 7,66,274

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₹ 7,56,274

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₹ 7,46,274

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₹ 7,36,274

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Solution

The correct option is A
₹ 7,66,274

Here, V = present value = ₹ 400000, n = 4 years, r = 15%,

Let, $V_{0}$ = Purchase price

Using $V = V_{0} {(1 - \frac{r}{100})}^{n},$
$400000 = V_{0} {(1 - \frac{15}{100})}^{4} o r, 400000 = V_{0} {(\frac{85}{100})}^{4}$

or, $V_{0} = 400000 \times (\frac{100}{85})^{4} = ₹ 7, 66, 274$ (approx)

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The cost of a vehicle, purchased 4 years ago, depreciates at the rate of 15% every year. If its present worth is ₹ 4,00,000, then find its purchase price.

The correct option is A ₹ 7,66,274 Here, V = present value = ₹ 400000, n = 4 years, r = 15%, Let, V0 = Purchase price Using V=V0(1−r100)n, 400000=V0(1−15100)4or, 400000=V0(85100)4 or, V0=400000×(10085)4=₹ 7,66,274 (approx)