Question : The value of equipment depreciates by 20% each year. How much less will the value of the equipment be after 3 years?
Option 1: 48.8%
Option 2: 51.2%
Option 3: 54%
Option 4: 60%
Correct Answer: 48.8%
Solution :
Assume the initial value as $P$ and calculate the depreciation value by using the formula $P(1-\frac{R}{100})^n$
where $R$ is the rate and $n$ is the time.
So, the value after 3 years
= $P(1-\frac{20}{100})^3$
= $P(1-\frac{1}{5})^3$
= $P(\frac{4}{5})^3$
= $P(0.8)^3$
= $0.512P$
So, the required percentage $=\frac{P - 0.512P}{P} ×100 = 48.8$%
The value of the equipment will be 48.8% less than the initial value after 3 years.
Hence, the correct answer is 48.8%.
Related Questions
Know More about
Staff Selection Commission Sub Inspector ...
Application | Eligibility | Selection Process | Result | Cutoff | Admit Card | Preparation Tips
Get Updates BrochureYour Staff Selection Commission Sub Inspector Exam brochure has been successfully mailed to your registered email id “”.