The value of a washing machine purchased two years ago depreciates at the annual rate of 10%. If its present value is Rs. 50,000, then its value after two years will be :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 40,500
Depreciation at a fixed rate is charged each year on the reduced value (like compound interest, but decreasing):
\( \displaystyle V = P\left(1 - \frac{r}{100}\right)^n = 50000\left(1 - \frac{10}{100}\right)^2 \)
\(= 50000 \times 0.81 = 40500\)
The purchase two years ago does not matter; the value is taken forward from the present Rs. 50,000.
Why the other options are incorrect
Option (1) Rs. 40,000 — Incorrect. This takes 10% of Rs. 50,000 (Rs. 5,000) off in both years; the second year’s 10% is on Rs. 45,000, which is Rs. 4,500.
Option (2) Rs. 42,000 — Incorrect. The value after two years is Rs. 40,500.
Option (4) Rs. 36,500 — Incorrect. The value after two years is Rs. 40,500.
Note: This topic was not in the CUET 2026 syllabus.