A sum of Rs. 50,000 is due after 2 years. What is its present value at a compound discount rate of 10% per annum?
Correct answer: B. Rs. 41,322.31
- A. Rs. 40,500.00
- B. Rs. 41,322.31
- C. Rs. 45,000.00
- D. Rs. 45,454.55
Explanation
Present value equals future value divided by (1 + r)ⁿ. Therefore, Rs. 50,000 ÷ (1.10)² equals approximately Rs. 41,322.31; Rs. 45,454.55 discounts for only one year.
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