The value of a residential flat constructed at a cost of Rs.10,00,000 is depreciating at a rate of 10% per annum. What will be its value 3 years after the construction
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e.Rs.7,29,000.
The value of a residential flat constructed at a cost of ₹10,00,000 is depreciating at a rate of 10% per annum.
Current value = P{(100 - r)/100}t, Where P is the initial value, R is the rate at which the value is decreasing annually and t is time in years.
Current value = 1000000{(100 - 10)/100}3 = 1000000(0.9)3 = 729000