Question:
Ms. Cherian purchased a boat for Rs 16000. If the total cost of the boat is depreciating at the rate of 5% per annum, calculate its value after 2 years.
Solution:
Value of the boat after two years $=\mathrm{P}\left(1-\frac{\mathrm{R}}{100}\right)^{\mathrm{n}}$
$\Rightarrow 16,000\left(1-\frac{5}{100}\right)^{2}$
$=16,000(0.95)^{2}$
$=14,440$
Thus, the value of the boat after two years will be Rs 14,440 .