what will be its worth after 5 years,If an automobile depreciates by 25% of its original value each year?
dharma asked:
If an automobile depreciates by 25% of its original value each year, and a new car was bought for Rs.16,000, what will be its worth after 5 years?
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If an automobile depreciates by 25% of its original value each year, and a new car was bought for Rs.16,000, what will be its worth after 5 years?
May 7th, 2010 at 3:22 am
faulty premise…
a vehicle depreciates, statistically, 33% as soon as it’s driven off the lot for th efirst year. ez80227
May 9th, 2010 at 6:51 pm
I can try this one..:
see the formula for depriciation will be: P(1-R/100)raised to the power t(time)
so =. 16000(1-25/100) raised to the power 5
=16000(75/100 * 75/100*75/100 *75/100* 75/100)
=16000* 75/100 * 75/100*75/100 *75/100* 75/100
=3796.87
so the depreciated value =16000-3796.87=12203.13 Aastha.vats.
May 11th, 2010 at 2:27 pm
depreciation :25% of original value
Original value:Rs.16000
16000×25/100=4000
Book value of automobile at the end of 1st year 16000 - 4000=12000
at the end of 2nd year = 12000-4000=8000
at the end of 3rd year=8000-4000=4000
at the end of 4th year=4000-4000=0
The book value of the automobile will be zero at the end of 4th year itself
It is presumed that the automobile purchased on the starting day of the accounting year. punarvasu