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The value of a flat worth ₹500,000 is depreciating at the rate of 10% per annum. In how many years will the value be reduced to ₹364,500?

Solution

✅ Correct Option: 2

For depreciation at rate rr% per annum for tt years, value after tt years =Initial Value×(1−r100)t= \text{Initial Value} × (1-\frac{r}{100})^t

Here, r=10r = 10, so value after tt years =500000×(0.9)t= 500000 × (0.9)^t

500000×(0.9)t=364500500000 × (0.9)^t = 364500

(0.9)t=364500500000=0.729(0.9)^t = \frac{364500}{500000} = 0.729

(0.9)t=(0.9)3(0.9)^t=(0.9)^3

t=3t = 3

Therefore, it will take 3 Years for the value to reduce to ₹364,500.

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