Question

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 1

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