Tick (✓) the correct answer

Question:

Tick (✓) the correct answer:

The value of a machine depreciates at the rate of 20% per annum. It was purchased 2 years ago. If its present value is Rs 40000, for how much was it purchased?

(a) Rs 56000

(b) Rs 62500

(c) Rs 65200

(d) Rs 56500

Solution:

(b) Rs. 62500

Here, $A=P \times\left(1-\frac{R}{100}\right)^{n}$

$=P \times\left(1-\frac{20}{100}\right)^{2}$

$=P \times\left(\frac{80}{100}\right)^{2}$

$=P \times\left(\frac{4}{5}\right) \times\left(\frac{4}{5}\right)$

$\Rightarrow 40000=\frac{16 P}{25}$

$\therefore P=\frac{40000 \times 25}{16}=$ Rs 62500

 

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