A new scooter is valued at ₹1,20,000. At the end of each year, its value is reduced by 12% of its value at the start of the year. What will be its value (in ₹) after 2 years?
- A1,50,528
- B1,00,875
- C96,450
- D92,928
Solution & Step-by-step Explanation
The value of the scooter deprecates by 12% compounded annually.
The multiplier for the value remaining after each year is:
1−0.12=0.88
Value after 2 years (V
2
):
V
2
=Initial Value×(0.88)
2
V
2
=1,20,000×0.7744
V
2
=12×7,744=92,928
Therefore, the value of the scooter after 2 years will be ₹92,928.
The multiplier for the value remaining after each year is:
1−0.12=0.88
Value after 2 years (V
2
):
V
2
=Initial Value×(0.88)
2
V
2
=1,20,000×0.7744
V
2
=12×7,744=92,928
Therefore, the value of the scooter after 2 years will be ₹92,928.