The valuation of a house depreciates at 10% in a year, compared to its value at the beginning of that year. If the current value of the house is Rs. 40,00,000, find what the value of the house will be three years from now.
- ARs.28,00,000
- BRs.29,16,000
- CRs.29,06,000
- DRs.29,26,000
Solution & Step-by-step Explanation
The formula for value after depreciation is:
A=P(1−
100
R
)
n
Where:
P=Current value=Rs. 40,00,000
R=Rate of depreciation=10%
n=Number of years=3
Substituting the values:
A=40,00,000×(1−
100
10
)
3
A=40,00,000×(
10
9
)
3
A=40,00,000×
1000
729
A=4000×729=Rs. 29,16,000
A=P(1−
100
R
)
n
Where:
P=Current value=Rs. 40,00,000
R=Rate of depreciation=10%
n=Number of years=3
Substituting the values:
A=40,00,000×(1−
100
10
)
3
A=40,00,000×(
10
9
)
3
A=40,00,000×
1000
729
A=4000×729=Rs. 29,16,000