Multiple choice

What is the present worth of Rs. 800, payable 5 years hence, at simple interest of 4 percent per annum?

  1. Rs. 600

  2. Rs. 666.67

  3. Rs. 600.67

  4. Rs. 500

  5. Rs. 650
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Simple interest formula: A = P(1 + rt/100). 800 = P(1 + (4*5)/100) = P(1 + 0.2) = 1.2P. P = 800 / 1.2 = 666.67.

AI explanation

Using the present worth formula, PW equals Amount times 100 divided by the quantity 100 plus R times T. Substituting the given values, PW equals 800 times 100 divided by the quantity 100 plus 4 times 5. This simplifies to 80000 divided by 120, which is Rs. 666.67.

Keep practicing — related questions