Question

The price of a car is n ₹ 3,50,000. The value of the car depreciates by 20% in the first year and after that it depreciates by 25% every year. What will be the car’s value after 3 years?

Answer 1

Given, the price of a car is ₹ 350000. The value of the car depreciates by 20% in the first year.

∴ 20% of ₹ 350000 = ₹ `(350000 xx 20/100)` = ₹ 70000

Price of the car after 1 years = ₹ (350000 – 70000) = ₹ 280000

After that it depreciates by 25% every year.

Number of years, n = 2

Value of an article after n years = `P(1 - r/100)^n`, where P is the original value at the time of buying, r is the rate of depreciation and n is the number of years.

Value of the car after 3 years = `280000(1 - 25/100)^2`

= `280000(3/4)2`

= 157500

Hence, the car’s value after 3 years is ₹ 157500.