A computer costing ₹5,00,000 will depreciate to a scrap value of ₹50,000 in 5 years. Using linear method of depreciation find the value of computer at the end of third year

₹2,30,000

The correct answer is Option (2) → ₹2,30,000

Annual depreciation = $\frac{Cost\,Price-Scrap\,Value}{Useful\,Life(in\,years)}$

$=\frac{5,00,000-50,000}{5}$

$=\frac{4,50,000}{5}=90,000$ per year

Depreciation of 3 years = $90,000×3$

$=2,70,000$

Value at the end of 3 years = Cost Price - Depreciation

$=5,00,000-2,70,000$

$=2,30,000$