Growth & Depreciation Applications
Population बढ़ना, कीमत घटना
Growth & Depreciation Applications
- Compound Interest
- Growth & Depreciation Applications
Apply compound formulas to population growth, depreciation and back-dated values.
🎯 Learning Objective
Apply compound formulas to population growth, depreciation and back-dated values.
💡 Concept
- Growth (population, price, bacteria): Future = P(1 + r/100)ⁿ
- Depreciation (machine, vehicle value): Future = P(1 − r/100)ⁿ
- Value n years AGO: divide — Past = P/(1 + r/100)ⁿ
- Different rates in different years → multiply the factors one by one
- Increase and decrease in successive years mix signs: ×1.1 then ×0.95
🧮 Key Formulas
Growth: P(1 + r/100)ⁿ
>
Depreciation: P(1 − r/100)ⁿ
>
n years ago: P ÷ (1 + r/100)ⁿ
✏️ Easy Example
Q. The population of a town is 20,000 and grows at 10% per year. Find the population after 2 years.
- 20000 × 1.1 = 22000
- 22000 × 1.1 = 24200
Answer: 24,200
🇮🇳 Real-Life Example
A ₹80,000 bike loses 15% value every year — after one year the resale apps quote around ₹68,000. That is depreciation compounding against you.
📝 Exam-Level Example
Q. A machine worth ₹50,000 depreciates at 20% per annum. Find its value after 2 years.
- 50000 × 0.8 = 40000
- 40000 × 0.8 = 32000
Answer: ₹32,000
📝 Exam-Level Example
Q. A town's population rose 10% in the first year and fell 5% in the second year. If it is now 20,900, find the population 2 years ago.
- P × 1.10 × 0.95 = 20900
- P × 1.045 = 20900
- P = 20900 ÷ 1.045
Answer: 20,000
🪄 Memory Trick
Draw the timeline and hang the factor on each year: up 10% → ×1.1, down 5% → ×0.95. Past value → divide by the whole chain.
⚠️ Common Mistakes
- ❌ Using simple growth (P + n × r% of P) instead of compound
- ❌ Multiplying by (1 + r/100)ⁿ when the question asks for a PAST value
- ❌ Using 1 + r/100 for depreciation instead of 1 − r/100
🏆 Exam Tips
- ✅ Population, bacteria, price rise → plus sign; machine, vehicle, mobile value → minus sign
- ✅ Mixed-rate years cannot use the power formula — chain the factors instead
📌 Summary
- Growth = P(1 + r/100)ⁿ, depreciation = P(1 − r/100)ⁿ
- Back in time → divide, not multiply
- Different yearly rates → multiply factors one by one
- Population maths = CI maths in disguise