The value of a car depreciates at the rate of 12% per annum. Its present value is ₹7,74,400. What was the value of the car 2 years ago?

Correct option is D

Given:

The car depreciates at the rate of 12% per annum.

The present value of the car is ₹7,74,400.

We need to find the value of the car 2 years ago.

Formula Used:

Initial Value =$$\frac{\text{Present Value}}{\left(1 - \frac{r}{100}\right)^n}$$​

r = the rate of depreciation,

n = the number of years.

Solution:

Present Value = ₹7,74,400,

Depreciation rate r = 12%,

Number of years n = 2.

Initial Value = $$\frac{7,74,400}{\left(1 - \frac{12}{100}\right)^2}$$​​

Initial Value = $$\frac{7,74,400}{(0.88)^2}$$​

Initial Value = $$\frac{7,74,400}{0.7744}$$​

Initial Value = 10,00,000
The value of the car 2 years ago was ₹10,00,000.