Rahul purchased an old scooter for ₹16000. If the cost of the scooter after 2 years depreciates to ₹14440, find the rate of depreciation.
Answer & explanation
Correct answer: option 4
The correct answer is option (4) : 5%
Given $P= ₹16000$
$S= ₹ 14440$
$n= 2\, years $
Let the rate of depreciation be r% p.a. then
$i=\frac{r}{100}$
$∴14440= 16000\left(1-\frac{r}{100}\right)^2$
$\left(1-\frac{r}{100}\right)^2=\frac{14440}{16000}=\frac{361}{400}$
$1-\frac{r}{100}=\frac{19}{20}$
$\frac{r}{100}=\frac{1}{20}$
$r= 5$%