Q. Mr. Durani bought a plot of land for ₹180000 and a car for ₹320000 at the same time. The value of the plot of land grows uniformly at the rate of 30% p.a., while the value of the car depreciates by 20% in the first year and by 15% p.a. thereafter. If he sells the plot of land as well as the car after 3 years, what will be his profit or loss?
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Answer:
Since, the value of land grows uniformly at the rate of 30% p.a. hence, by the growth formula,
Growth of plot of land after 3 years
\[
V_{\text{land}} = 180000 \times \left(1 + \frac{30}{100}\right)^{3} = 180000 \times \left(\frac{13}{10}\right)^{3} = 180000 \times \frac{2197}{1000} = \text{₹} 395460
\]
Depreciation of car after 3 years
\[
V_{\text{car}} = 320000 \times \left(1 – \frac{20}{100}\right) \times \left(1 – \frac{15}{100}\right)^{2} = 320000 \times \frac{80}{100} \times \left(\frac{85}{100}\right)^{2} = \text{₹} 184960
\]
Total initial investment
\[
\text{Total Initial Investment} = 180000 + 320000 = \text{₹} 500000
\]
Total value after 3 years
\[
\text{Total Value after 3 Years} = 395460 + 184960 = \text{₹} 580420
\]
Profit or Loss
\[
\text{Profit or Loss} = 580420 – 500000 = \text{₹} 80420
\]
After 3 years profit of Mr. Durani would be ₹80420.