The cost of a mobile phone is Rs 9000. Its value depreciates at the rate of 5% p.a. Find the total depreciation in its value at the end of 2 years.

₹ 877.50

The correct answer is option (3) : ₹ 877.50

Given $P= ₹9000$

$i=\frac{5}{100}=0.05$

$n= 2\, years $

$S=P(1-i)^n$

$= 9000(1-0.05)^2$

$= 9000(0.95)^2$

$= 9000×0.9025$

$= 8122.5$

∴ Total depreciation $= ₹9000-₹8122.50$

$= ₹ 877.50$