Depreciation over two years — Percentages Aptitude Question
Depreciation over two years: A machine worth ₹1,00,000 depreciates at 10% per annum. What is its value after two… Answer and worked solution on CodeKairo.
- Topic: Percentages
- Section: Quantitative Aptitude
- Difficulty: Easy
- Time target: 45 seconds
Question
A machine worth ₹1,00,000 depreciates at 10% per annum. What is its value after two years?
Options
- ₹80,000
- ₹81,000
- ₹82,000
- ₹90,000
Show the answer and the worked solution
Correct answer: B. ₹81,000
Worked solution
- After one year: 1,00,000 × 0.90 = 90,000.
- After two years: 90,000 × 0.90 = ₹81,000.
Answer: ₹81,000.
The idea
Depreciation is compound decay: multiply by (1 − r/100) once per period. Two years at 10% removes 19%, not 20%.
Shortcut. Two years at 10% keeps 0.9² = 0.81 of the value, so the machine is worth 81% of ₹1,00,000 = ₹81,000.
Common trap. "₹80,000" — taking 10% of the original ₹1,00,000 in both years (simple, not compound, depreciation).