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.
Answer & explanation
Correct answer: option 3
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 $= ₹9000-₹8122.50$
$= ₹ 877.50$