Multiple choice

Find the present worth of 1749.6 due in 2 years at 8% per annum compound interest

  1. 1200

  2. 1400

  3. 1500

  4. 1650
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C Correct answer
Explanation

Present worth = Amount / (1 + r/100)^n. PW = 1749.6 / (1 + 0.08)^2 = 1749.6 / 1.1664 = 1500.

AI explanation

The present worth formula for compound interest is Present Worth equals Amount divided by (1 plus R divided by 100) raised to the number of years. Substituting the given values, Present Worth equals 1749.6 divided by (1 plus 8 divided by 100) squared. This simplifies to 1749.6 divided by 1.1664, which equals 1500.

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