Name: Applications of Compound Interest: Example
Uploaded: 2019-07-19
Duration: 7 min 50 s
Description: Compound interest plays a very important role in many aspects of our daily life. Let's take a look at this video and understand that compound interest that h...

Question

The price of a car is

₹ 350000

. The value of the car depreciates by

20 %

in the first year and after that it depreciates by

25 %

every year. What will be the car's value after

3

years?

Accepted Answer

Given, the price of a car is $₹ 350000$ . The value of the car depreciates by $20 %$ in the first year.

$∴ 20 %$ of $₹ 350000 = ₹ (350000 \times \frac{20}{100}) = ₹ 70000$

Price of the car after $1$ years $= ₹ (350000 - 70000) = ₹ 280000$

After that it depreciates by $25 %$ every year.

Number of years, $n = 2$

Value of an article after $n$ years $= P {(1 - \frac{r}{100})}^{n}$ , where $P$ is the original value at the time of buying, $r$ is the rate of depreciation and $n$ is the number of years

Value of the car after $3$ years $= 280000 {(1 - \frac{25}{100})}^{2}$

$= 280000 {(1 - \frac{1}{4})}^{2}$

$= 280000 {(\frac{3}{4})}^{2}$

$= 157500$

Hence, the car's value after $3$ years is $₹ 157500$ .

The price of a car is $₹ 350000$ . The value of the car depreciates by $20 %$ in the first year and after that it depreciates by $25 %$ every year. What will be the car's value after $3$ years?

Important Questions on Compound Interest

Learn and Prepare for any exam you want !

The price of a car is ₹350000. The value of the car depreciates by 20% in the first year and after that it depreciates by 25% every year. What will be the car's value after 3 years?

Important Questions on Compound Interest

Learn and Prepare for any exam you want !

The price of a car is $₹ 350000$ . The value of the car depreciates by $20 %$ in the first year and after that it depreciates by $25 %$ every year. What will be the car's value after $3$ years?