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Question
A new computer costs Rs 1,00,000. The depreciation of computers is very high as new models with better technological advantages are coming into the market. The depreciation is as high as 50% every year. How much will the cost of computer be after two years?
Solution
The cost of the new computer = ₹ 100000
The depreciation rate = 50% per annum
Time period (T) = 2 years
Let the cost of computer after 2 years = ₹ A
∵ `A = P(1 - R/100)^T`
= `100000(1 - 50/100)^2`
⇒ `A = 100000 xx 1/2 xx 1/2`
= 25000 × 1
∴ A = ₹ 25000
Hence, the cost of computer after 2 years is ₹ 25000.
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