Question

A motorcycle costs Rs. 60,000. If the depreciation rate is 15%, what would be its cost after one year?
1. Rs. 42,000
2. Rs. 45,000
3. Rs. 51,000
4. Rs. 41,000

Answer 1

Correct Answer - Option 3 : Rs. 51,000

FORMULA:

\(A = P(1 - R/100)^t\)

Where,

A = depreciated amount after t years

P = current cost of that product

R = depreciation rate

t = number of years the product has been depreciated.

CALCULATION:

P = 60,000

R = 15 % and t = 1

\(A = 60000(1 - 15/100)^1\)

A = 60000 × 85 / 100

A = 51000

Hence, Rs. 51,000 is the answer.