Ravi buys a car worth ₹4.5 lakhs. The car's value depreciates by 20% each year. He drives it for 2 years and sells it for ₹3 lakhs. Find his overall profit or loss % in this transaction.
A
5.33%
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B
3.75%
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C
4.16%
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D
5.86%
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Solution
The correct option is C 4.16% Original value of the car = ₹4.5 lakhs
After 1st year depreciation, value of the car = 4.5 lakhs - 20% of 4.5 lakhs =4.5−20100×4.5=4.5−0.9 = ₹3.6 lakhs
After 2nd year depreciation, value of the car = 3.6 lakhs - 20% of 3.6 lakhs =3.6−20100×3.6 = ₹2.88 lakhs