Question

The cost of Maruti 800 in the year 1998 was Rs. 2,50,000. After the end of one year and four months, the price underwent depreciation by 10% p.a. Its new price is:

• A. Rs. 2,25,000
• B. Rs. 2,17,500
• C. Rs. 2,40,000
• D. Rs. 2,23,000

Answer 1

The correct option is B

Rs. 2,17,500

Depreciation means decrease in the value due to use and age of item. So, price at the end of one year = Rs. 2,50,000(1-10/100) = Rs. 2,25,000. Depreciation for next 4 months = Rs. 2,25,000 x 10/100 x 1/3 = Rs. 7500. So, the depreciated value after one year and four months = Rs. (2,25,000 - 7,500) = Rs 2,17,500