The cost of a refrigerator is ₹9000. Its value depreciates at the rate of 5% every year. Find the total depreciation in its value at the end of 2 years.

Depreciation formula,

V = $V_0\Big(1 - \dfrac{r}{100}\Big)^n$

Putting values in formula we get,

$V = ₹9000\Big(1 - \dfrac{5}{100}\Big)^2 \\[1em] = ₹9000 \times \Big(\dfrac{95}{100}\Big)^2 \\[1em] = ₹9000 \times \Big(\dfrac{19}{20}\Big)^2 \\[1em] = ₹9000 \times \dfrac{19}{20} \times \dfrac{19}{20} \\[1em] = ₹\dfrac{9000 \times 361}{400} \\[1em] = ₹8122.5$

Depreciation = ₹9000 - ₹8122.5 = ₹877.5

Hence, the total depreciation in its value at the end of 2 years = ₹877.5