Question

The price of a car depreciates every year by 10%. What was its value 3 years ago, if its present value is Rs 36,450?

• A. Rs 45,000
• B. Rs 55,000
• C. Rs 50,000
• D. Rs 49,500

Answer 1

The correct option is C Rs 50,000

In case of depreciation,
$A=P[1-\frac{r}{100}{]}^n$
$\Rightarrow 36,450=P[1-\frac{10}{100}{]}^3$
$\Rightarrow P=\frac{36,450}{0.729}=50,000$

Thus, 3 years ago, the price of the car was Rs 50,000.