Question

What is the present worth of a sum of ₹ 10,920 due six months hence at 8% p.a. simple interest?

Answer 1

Sum ₹ 10,920, Period(n) = `6/12` years, r = 8% p.a.

To find P.W.

S.D. = P.W. + T.D.            …(i)

∴ S.D. = P.W. + `(("P.W." xx "n" xx "r")/100)`

∴ S.D. = P.W. `(1 + ("n" xx "r")/100)`

∴ 10,920 = P.W. `(1 + (6/12)/100 xx 8)`

∴ 10,920 = P.W. `(1 + 4/100)`

∴ 10,920 = P.W. `((100 + 4)/100)`

∴ 10,920 = P.W. `(104/100)`

∴ P.W. = `(10,920 xx 100)/104`

∴ P.W. = 10,500

∴ Present worth of a sum of ₹ 10,920 due six month at 8% p.a. simple interest is ₹ 10,500.