Question

Find the present worth of $Rs.500$ due $2\frac{1}{2}$ years hence, reckoning simple interest at $4$ percent per
annum.

Answer 1

$Principal\left(P\right)=Rs.500$

$Time=2\frac{1}{2}=2.5years$

$Rate=4$%

Hence,

$SI=\frac{P\times R\times T}{100}=\frac{500\times 4\times 2.5}{100}=50$

So, present worth is

$P+SI=500+50=Rs.550$