Depreciation and Profit/Loss

Here are the solutions to your questions: 3. Depreciation and Profit/Loss a) The formula to find compound depreciation is: V_t = P(1 - (R)/(100))^t where V_t is the value after t years, P is the original value, R is the depreciation rate, and t is the time in years. b) To find the selling price of the truck after 3 years: Step 1: Identify the given values. Original cost of truck (P) = NRs. 40,00,000 Depreciation rate (R) = 15% p.a. Time (t) = 3 years Step 2: Apply the compound depreciation formula. V_t = P(1 - (R)/(100))^t V_3 = 40,00,000(1 - (15)/(100))^3 V_3 = 40,00,000(1 - 0.15)^3 V_3 = 40,00,000(0.85)^3 V_3 = 40,00,000 × 0.614125 V_3 = 24,56,500 The selling price of the truck after 3 years is NRs. 24,56,500. c) To find the profit or loss percent to the businessman: Step 1: Calculate the total money spent by the businessman. Total money spent = Original cost of truck = NRs. 40,00,000 Step 2: Calculate the total money received by the businessman. Money received from selling the truck = NRs. 24,56,500 (from part b) Earnings from using the truck = NRs. 9,07,000 Total money received = NRs. 24,56,500 + NRs. 9,07,000 = NRs. 33,63,500 Step 3: Calculate the net profit or loss. Net Profit/Loss = Total money received - Total money spent Net Profit/Loss = NRs. 33,63,500 - NRs. 40,00,000 Net Profit/Loss = -NRs. 6,36,500 Since the value is negative, it is a loss. Loss = NRs. 6,36,500 Step 4: Calculate the loss percentage. Loss Percentage = LossOriginal Cost × 100\% Loss Percentage = (6,36,500)/(40,00,000) × 100\% Loss Percentage = 0.159125 × 100\% Loss Percentage = 15.9125\% The businessman incurred a loss of 15.9125%. 4. Currency Exchange a) A currency exchange rate is the value of one country's currency in terms of another country's currency. It indicates how much of one currency can be exchanged for a unit of another currency. b) To find how many American dollars Pemba will get for NRs. 2,15,160: Step 1: Identify the relevant exchange rate. Pemba is exchanging Nepali Rupees for American Dollars, meaning the bank is selling USD to Pemba. Bank's selling rate for 1 USD = NRs. 143.44 Step 2: Calculate the amount of USD Pemba receives. Amount in USD = Total NRsSelling rate Amount in USD = (2,15,160)/(143.44) Amount in USD = 1500 Pemba will get 1500 American dollars. c) To find how many Nepali rupees Pemba will get back after exchanging the American dollars on the same day: Step 1: Identify the relevant exchange rate. Pemba now has USD and wants to convert them back to NRs, meaning the bank is buying USD from Pemba. Bank's buying rate for 1 USD = NRs. 142.84 Step 2: Calculate the amount of NRs Pemba receives. Amount of USD Pemba has = 1500 USD (from part b) Amount in NRs = Amount in USD × Buying rate Amount in NRs = 1500 × 142.84 Amount in NRs = 2,14,260 Pemba will get back NRs. 2,14,260.