Question

A car was bought in 2013 for 4,00,000.If the value of the car depreciates by 5% each year,

find its worth in the year 2015.

Answer 1

Answer: 361000

Explanation:

In 2014, the worth of the car will be:

= 400000 - (5% × 400000)

= 400000 - (0.05 × 400000)

= 400000 - 20000

= 380000

In 2015, the worth of the car will be:

= 380000 - (5% × 380000)

= 380000 - (0.05 × 380000)

= 380000 - 19000

= 361000

We can also use the formula:

A = P × (1 - r/100)^n

A = 400000 × (1 - 5/100)²

A= 400000 × (1 - 0.05)²

A = 400000 × (0.95)²

A = 400000 × 0.9025

A = 361000

The worth of the car will be 361000