Question 117

The price of motor cycle depreciates every year by 10%. If the value of the motor cycle after 3 years will be Rs 36450, then what is the present value (in Rs) of the motor cycle?

Solution

Let the present value of motor cycle = Rs. $$x$$

Rate of depreciation = 10%

=> Value of the motor cycle after 3 years = $$x\times(1-\frac{10}{100})\times(1-\frac{10}{100})(1-\frac{10}{100})$$

=> $$x\times(\frac{90}{100})^3=36450$$

=> $$x=36450\times\frac{100^3}{90^3}$$

=> $$x=0.05\times1000000=50000$$

$$\therefore$$ The present value (in Rs) of the motor cycle = Rs. 50,000

=> Ans - (B)

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