Question

sunil purchased a motorcycle for Rs. 30000 five years ago. If the fixed annual rate of depreciation is 5% and he gas sold it for Rs.20000 his gain/loss% is

Answer 1

Purchase Price = Rs 30,000

Find the value of the motorcycle after depreciation:

Value = Original amount (1 - rate)ⁿ where n is the number of years.

Value = 30000( 1 - 0.05)⁵

Value = Rs 23213.43

Find the profit /loss :

Selling Price = Rs 20,000

Since Rs 23213.43 > Rs 20,000  ⇒ It is a profit

Profit =23,213.43  - 20,000 = Rs 3,213.43

Find the profit percentage:

Profit percentage = Profit/cost price x 100

Profit percentage = 3,213.43/30,000 x 100 = 10.7%

Answer: The profit made is 10.7%

Answer 2

To find the depreciation value, Value = Original amount (1 - rate)ⁿ (where n is the number of years), Value = 30000( 1 - 0.05)⁵,

Value = Rs 23213.43 then compare the profit value and actual value and then minus the selling price from the actual value profit = 23,213.43  - 20,000 = Rs 3,213.43