A bike costing ₹120000 has scrap value of ₹30000. If the book value of the bike at the end of third year is ₹90000, then the useful life of the bike is,

9 years

The correct answer is Option (4) → 9 years

Assuming straight line depreciation,

$D=\frac{P-S}{n}$

and,

Book value after t-years,

$v_t=P-Dt$

$90,000=1,20,000-3D$

$⇒3D=30,000$

$⇒D=10,000$

and,

$n=\frac{P-S}{D}=\frac{1,20,000-30,000}{10,000}$

$=9\, years$