Question

The price of a mobile phone depreciates at a rate of 6% every year. If its current cost is 20,000, what will be its price after 4 years?




ANSWER IS :15614.98
I NEED EXPLAINATION ​

Answer 1

Answer:

The exact answer is 15614.9792

Step-by-step explanation:

In this question we are required to follow Reducing balance method.

Cost in 1styear                          = 20000

Depreciation @ 6% : 20000x6% =(1200)

Cost in 2nd year: 20000-1200 = 18800

Depreciation @ 6% : 18800x6%=(1128)

Cost in 3rd year: 18800-1128 =17672

Depreciation @ 6% : 17672x6%=(1060.32)

Cost in 4th year: 17672-1060.32= 16611.68

Depreciation @ 6% : 16611.68x6%=(996.7008)

Therefore cost after 4 years : 116611.68-996.7008 = 15614.9792

HOPE YOU UNDERSTOOD!!