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The value of a plant depreciates by 10 % annually. If the present value of the plant is Rs. 100000, then what will be its value after 2 years?

Correct answer: D. Rs. 81000

  • A. Rs. 8000
  • B. Rs 10000
  • C. Rs. 18000
  • D. Rs. 81000

Explanation

A 10% annual depreciation leaves 90% of the value each year. After 2 years, the value is Rs. 100,000 × 0.90 × 0.90 = Rs. 81,000. The likely mistake is subtracting 20% of the original value only once, which would give Rs. 80,000 and does not account for compound depreciation.

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