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EMI, CAGR & Depreciation · Question 64 of 66

Question 64

MediumOriginal question

An asset costing ₹1,50,000 is depreciated by ₹12,000 a year by the linear method. What is the rate of depreciation, as a percentage of the cost?

Options for question 64

Show the answer and explanation
CorrectNot quiteAnswer C

Correct answer: C

Explanation

  1. The rate compares one year's depreciation with the cost.

  2. 12,0001,50,000×100=8%\frac{12{,}000}{1{,}50{,}000} \times 100 = 8\%.

Worth noting

12.5% is 1,50,00012,000\frac{1{,}50{,}000}{12{,}000}, the number of years to write off the whole cost, not a rate.

Concept
The rate of depreciation
Typical time
90 s
Your time
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The rule this testsLinear depreciation
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