The value of an article depreciated from ₹18,000 to ₹14,580 in 2 years. Find the yearly rate of depreciation in the value of the article.
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Correct answer: A
Explanation
The correct answer is option 1 i.e. 10%
Initial Value (V1) = Rs. 18,000
Final Value after 2 years (V2) = Rs. 14,580
Time (T) = 2 years
Depreciation (when depreciation rate is constant) -
V2 = V1(1 - R/100)T
R = 100[1 - (V2/V1)1/T]
[Where, R is the rate of depreciation (in percentage)]
R = 100[1 - (14500/18000)1/2]
R = 100[1 - (0.81)1/2]
R = 100(1 - 0.9)
R = 10%