The value of an ornament depreciates every year by 5%. If the present value of the ornament is Rs. 12,500, what will be its value after 2 years?

Correct option is D

Given:
The present value of the ornament =Rs. 12,500
Depreciation rate = 5% per annum
Time period = 2 years
Formula Used:
​$$\text{Value after depreciation} = \text{Present Value} \times (1 - \text{Depreciation Rate})^ \text{Time}$$​​
Let the present value be P, depreciation rate be D, and time period be T.
Solution:
​$$\text{Value after T years} = P \times (1 - D)^T \\\text{Value after 2 years} = 12,500 \times (1 - 0.05)^2 \\\text{Value after 2 years} = 12,500 \times (0.95)^2 \\\text{Value after 2 years} = 12,500 \times 0.9025 = 11,281.25$$​​
Thus, the value of the ornament after 2 years will be Rs. 11,281.25. 
Alternate Solution: