The cost of a washing machine depreciation each year by a constant rate. IF it depreciates by ₹720 in the second year and by ₹648 in the third year, then the rate of depreciation per annum is :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 10%
Value after $n$ years = $P(1-r)^n$
Depreciation in year $n$ = $P(1-r)^{n-1}×r$
$\frac{P(1-r)^1×r}{P(1-r)^2×r}=\frac{648}{720}=0.9$
$r=0.1=10\%$