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Ms. Cherian Purchased a Boat for Rs 16000. If the Total Cost of the Boat is Depreciating at the Rate of 5% per Annum, Calculate Its Value After 2 Years.

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Question

Ms. Cherian purchased a boat for Rs 16000. If the total cost of the boat is depreciating at the rate of 5% per annum, calculate its value after 2 years.

Sum
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Solution

Value of the boat after two years = P \[\left( 1 - \frac{R}{100} \right)^n \]
\[ \Rightarrow 16, 000 \left( 1 - \frac{5}{100} \right)^2 \]
\[ = 16, 000 \left( 0 . 95 \right)^2 \]
\[ = 14, 440\]
Thus, the value of the boat after two years will be Rs 14, 440.
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