A car is purchased for 348000. Its value depreciates at 10% per annum during the first
year and at 20% per annum during the second year. What will be its value after 2 years?
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Answer:
Present value of car = 348000(P)
Rate depreciates for 1st year = 10%(p=10%)
Rate depreciates for the 2nd year = 20%(q=20%)
Time=n
Now,
Value = P(1-p÷100)×(1-q÷100)
=348000×(1-10÷100)×(1-20÷100)
=348000×(1-1/10)×(1-2/5)
=348000×9/10×4/5
=348000/10×9×4/5
=34800/5×9×4
=6960×9×4
=25056
Therefore, Value of the car after 2 years is 25056
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