The value of a desktop computer depreciates at the rate of 20% every year. It was purchased 3 years ago. If its present value is ₹12,288, what was its purchase price 3 years ago?

Correct option is A

Given:

The desktop computer depreciates at a rate of 20% per year.

The present value of the computer is ₹12,288.

The computer was purchased 3 years ago.

Formula Used:

Present Value$$= \text{Initial Value} \times \left(1 - \frac{\text{ Rate}}{100}\right )^n$$​

where:

n is the number of years.

Solution:

Let the purchase price (initial value) be P.

Present Value = Initial Value ×$$\left(1 - \frac{\text{ 20}}{100}\right )^3$$

12288 = P × $$(0.80)^3$$​

P $$= \frac{12,288}{0.512} = 24,000$$​

Thus, the purchase price of the computer 3 years ago was ₹24,000.