Question

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.

• A. ₹4,93,125
• B. ₹4,93,175
• C. ₹4,93,525
• D. ₹4,96,725

Answer 1

The correct option is A

₹4,93,125

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, $315600=P_0{(1-\frac{20}{100})}^{2}315600=P_0{\left(\frac{80}{100}\right)}^2=P_0\left(\frac{16}{25}\right)P_0=315600\times \frac{25}{16}=₹4,93,125$

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