The value of an equipment depreciates by 20% each year. If the difference between the prices at the end of 3rd and 4th year is ₹3,328, then what is the price of the equipment at the end of the second year?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. ₹20,800.
Price at the end of 3rd year = 0.8 × P
Price at the end of 4th year = 0.8 × (price at end of 3rd year) = 0.8 × 0.8 × P = 0.64P
The difference between the prices at the end of 3rd and 4th year is ₹3,328 =
(0.8P) − (0.64P) = 3328
0.16P = 3328
P = = 20800