Question

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50. The value of a TV that was purchased in January 1999, depreciates at 12% per annum. If its value in January 2001 is Rs. 4,840, then what was purchase

Answer 1

The purchase cost of the TV in 1999 is Rs. 6250.

Given:

The TV that was purchased in January 1999,

The rate of depreciation = 12% per annum

The value of January 2001 is Rs. 4840  

To find:

What was the purchase cost of the TV ..?  

Solution:

Formula used:

 Future value = P(1-R/100)^t

Where P = initial value

R = Rate of depreciation

t = Time period

Let x be the cost of the TV in 1999  

And the cost of a TV in 2001 is Rs. 4,840

Here time period t = 2001 -1999 = 2

By the given formula

The future value of TV = x(1-12/100)²

=  x(1- 0.12)²

=  x (0.88)²

=  0.7744x  

Given that after 2 years the cost of TV = Rs. 4,840

=> 0.7744x  = 4840

=> x = 6250

Therefore,

The purchase cost of the TV in 1999 is Rs. 6250.

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