Question

The value of a refrigerator which was purchased 2 years ago, depreciates at $12\%$ per annum. If its present value is Rs. 9680, for how much was it purchased?

Answer 1

Let the refrigerator was purchased for = Rs. P
Rate of depreciation (R) $=12\%$ p.a.
Period (n) = 2 years
and present value (A) = Rs. 9680
$\therefore A=P{(1-\frac{R}{100})}^n$
$\Rightarrow Rs.9680=P{(1-\frac{12}{100})}^2$
$\Rightarrow Rs.9680=P{\left(\frac{22}{25}\right)}^2$
$\Rightarrow P=Rs.9680÷{\left(\frac{22}{25}\right)}^2=Rs.9680\times {\left(\frac{25}{22}\right)}^2$
$=Rs.9680\times \frac{25\times 25}{22\times 22}=Rs.12500$
$\therefore$ 2 years ago it was purchased for Rs. 12500.