Question

Find the present value of Rs. $10,000$ to be required after $5$ years if the interest rate be $9\%$. Given that $(1.09{)}^5=1.5386$.

• A. $6,994.42$
• B. $6,949.24$
• C. $6,449.24$
• D. $6,499.42$

Answer 1

The correct option is D $6,499.42$

Here, $i=0.09=9\%$
$n=5$
$A_n=10,000$
Required present value $=\frac{A_n}{(1+i{)}^n}$
$=\frac{10,000}{(1+0.09{)}^5}$
$=Rs.6499.42$.