Multiple choice

Mr. Johnny promised to pay Rs. 800 after 4 years to you. What is the present value of money if the rate of interest is 8%?

  1. $800$
  2. $736$
  3. $544$
  4. $588$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Present value = Future value / (1 + r)^n = 800 / (1.08)^4 = 800 / 1.3605 = Rs. 588 (approx). This discounts the future amount to today's value using the given interest rate.

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