Question

The cost of a vehicle is Rs. $1,75,000$. If its value depreciates at the rate of $20$ % per annum, then the total depreciation after $3$ years will be:

• A. Rs. $86,400$
• B. Rs. $82,500$
• C. Rs. $84,500$
• D. Rs. $85,400$

Answer 1

Answer: (D)

Rs. $85,400$

Value of the vehicle after 3 years
$=1,75,000\times {(1-\frac{20}{100})}^3$
$=1,75,000\times \frac{4}{5}\times \frac{4}{5}\times \frac{4}{5}$
= Rs. 89, 600
$\therefore$ Total depreciation = 1, 75, 000 - 89, 600
$=Rs.85,400$