Q. 5

A scooter is boug

Answer :

Present value, P = Rs.32000

Time, n = 2 years

Rate of depreciates, R = 10% per annum

Now,

Amount (A) = P (1 + R/100)ⁿ [Where, A = Amount with compound interest

P = Present value

R = Annual interest rate

n = Time in years]

∴ Value = P (1 - R/100)ⁿ [∵ Rate decreases]

= 32000 (1 - 10/100)²

= 32000 (1 - 1/10)²

= 32000 (9/10)²

= 32000 × 9/10 × 9/10

= 320 × 9 × 9

= 25920

∴ Value of scooter will be Rs.25920 after 2 years.

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