The cost of a car purchased 2 years ago, depreciates at the rate of 20% every year. If its present worth is Rs 315600, find its purchase price.
Answer & explanation
Correct answer: option 1
The correct answer is option (1) : ₹493125
Given $S= ₹315600$
$n= 2\, years $
$i = \frac{20}{100}=0.2$
Since $S= P(1-i)^n$
$315600= P(1-0.2)^2$
$P=\frac{315600}{0.64}$
$= 493125$
Hence, the purchase price of car = ₹493125