The value of an article which was purchased 2 years ago, depreciates at 12% per annum. If its present value is Rs. 9680, the price at which it was purchased is:

by

(A) Rs. 12000
(B) Rs. 12500 
(C) Rs. 16500
(D) Rs. 16350

🧠 Explanation:

  • Let the original price be P.
  • Depreciation formula: Present Value = P × (1 - r)t, where r = 12% = 0.12 and t = 2 years.
  • So, 9680 = P × (1 - 0.12)2 = P × (0.88)2 = P × 0.7744.
  • Now, solve: P = 9680 ÷ 0.7744 = 12500.

Correct Answer: (B) Rs. 12500