Present value, P = Rs.32000
Time, n = 2 years
Rate of depreciates, R = 10% per annum
Now,
Amount (A) = P (1 + R/100)n [Where, A = Amount with compound interest
P = Present value
R = Annual interest rate
n = Time in years]
∴ Value = P (1 - R/100)n [∵ Rate decreases]
= 32000 (1 - 10/100)2
= 32000 (1 - 1/10)2
= 32000 (9/10)2
= 32000 × 9/10 × 9/10
= 320 × 9 × 9 = 25920
∴ Value of scooter will be Rs.25920 after 2 years.
