The cost of car, purchased 2 years ago, depreciates at the rate of $20 %$ every year. If its present worth is ₹3,15,600, find its purchase price.

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Solution

Given, P = Present value = ₹3,15,600, t = 2 years, r = $20 %$

Let, $P_{0}$ = Purchase price

We have, $P = P_{0} {(1 - \frac{r}{100})}^{n}$
Then, $315600 = P_{0} {(1 - \frac{20}{100})}^{2} 315600 = P_{0} {(\frac{80}{100})}^{2} = P_{0} (\frac{16}{25}) P_{0} = 315600 \times \frac{25}{16} = ₹ 4, 93, 125$

So, the purchase price of the car is ₹4,93,125.

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The cost of car, purchased 2 years ago, depreciates at the rate of 20% every year. If its present worth is ₹3,15,600, find its purchase price.

Given, P = Present value = ₹3,15,600, t = 2 years, r = 20% Let, P0 = Purchase price We have, P=P0(1−r100)n Then, 315600=P0(1−20100)2 315600=P0(80100)2=P0(1625) P0=315600×2516=₹4,93,125 So, the purchase price of the car is ₹4,93,125.

The cost of car, purchased 2 years ago, depreciates at the rate of $20 %$ every year. If its present worth is ₹3,15,600, find its purchase price.