Question

The value of a car depreciates every year at the rate of 10% on its value at the beginning of the year. If the present value of the car is Rs 52,488 its worth four years ago was

• A. $Rs68.232$
• B. $Rs68.234$
• C. $Rs69.862$
• D. $Rs80,000$

Answer 1

The correct option is D $Rs80,000$

Present Value $A=Rs.52,488$
Depreciation rate $r=10\%$ per annum
Time $t=4$ years
Let initial value be $P$
We know the formula, $A=P(1-\frac{r}{100}{)}^t$
Substituting the given values, we get.
$52,488=P[1-\frac{10}{100}{]}^4$
$52,488=P(0.9{)}^4$
$P=\frac{52488}{0.6561}$
$P=Rs.80,000$