Question

# Naman purchased an old bike for Rs. 20000. If the cost of his bike is depreciated at a rate of 5% per annum, then find out the cost of the bike after 2 years?A. Rs. 18050B. Rs. 15000C. Rs. 1900D. Rs. 18000

Hint: We are asked to find out the cost of the bike after 2 years with depreciation given. Given the initial price and depreciation we can find the cost by using the formula directly available. Then only thing that we have to put the value and get the answer.

∴ Cost of bike after 2 years = initial price ×${\left( {1 - \dfrac{{rate{\text{ }}of{\text{ }}depreciation}}{{100}}} \right)^{time}}$
=$20000 \times {\left( {1 - \dfrac{5}{{100}}} \right)^2}$
= $20000 \times {\left( {\dfrac{{19}}{{20}}} \right)^2}$