The value of a furniture set depreciates every year by 5%. If the present value of thefurniture is ₹1,20,000, what will be its value after 2 years?

Correct option is A

Given:

Present value of the furniture = ₹1,20,000

Depreciation rate = 5% per annum

Time = 2 years

Solution:

Value of furniture after 2 years

​$$= 120000 \times \left(1 - \frac{5}{100}\right) \times \left(1 - \frac{5}{100}\right)$$​​

​$$= 120000 \times \frac{95}{100} \times \frac{95}{100}$$​​

= ₹1,08,300