The price of a car depreciates in the first year by 25% in the second year by 20%

Ques - The price of a car depreciates in the first year by 25% in the second year by 20% in the third year by 15% and so on. The fixed price of the car after 3 years, if the present cost of the car is 10,00,000.

(a) 7,80,000

(b) 5,10,000

(c) 6,90,000

(d) 1,70,000

Solution - 

Let,

The present cost of the car = 10,00,000

The price of a car depreciates in the first year = 25%

= 25% of 10,00,000

= (25/100) × 10,00,000

= 2,50,000

The car price after first year of depreciation = 10,00,000 - 2,50,000 

The car price after first year of depreciation = 7,50,000

The price of a car depreciates in the second year = 20%

= 20% of 7,50,000

= (20/100) × 7,50,000

= 1,50,000

The car price after second year of depreciation = 7,50,000 - 1,50,000

The car price after second year of depreciation = 6,00,000

The price of a car depreciates in the third year = 15%

= 15% of 6,00,000

= (15/100) × 6,00,000

= 90,000

The car price after third year of depreciation = 6,00,000 - 90,000

The car price after third year of depreciation = 5,10,000

Hence,

The fixed price of the car after 3 years is 5,10,000.