Rahul purchased an old scooter for ₹16000. If the cost of the scooter after 2 years depreciates to ₹14440, find the rate of depreciation.

5%

The correct answer is option (4) : 5%

Given $P= ₹16000$

$S= ₹ 14440$

$n= 2\, years $

Let the rate of depreciation be r% p.a. then

$i=\frac{r}{100}$

$∴14440= 16000\left(1-\frac{r}{100}\right)^2$

$\left(1-\frac{r}{100}\right)^2=\frac{14440}{16000}=\frac{361}{400}$

$1-\frac{r}{100}=\frac{19}{20}$

$\frac{r}{100}=\frac{1}{20}$

$r= 5$%