Multiple choice

The present worth of Rs. 189 due in 2 years at 4% per annum compound interest is

  1. Rs. 174.74

  2. Rs. 204.42

  3. Rs. 175

  4. Rs. 173.32

  5. Rs. 173.16
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A Correct answer
Explanation

Present worth = Amount / (1 + r/100)^n = 189 / (1 + 4/100)^2 = 189 / (1.04)^2 = 189 / 1.0816 = 174.74.

AI explanation

Using the present worth formula under compound interest, PW equals Amount divided by (1 + R/100)^T. Substituting the given values gives 189 / (1 + 0.04)^2, which equals 189 / (1.0816). Dividing 189 by 1.0816 yields the present worth of Rs. 174.74.

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