Question

what is the present value of Rs 10,000 due in 2 years at 8%p.a

Answer 1

$A=10,000$

$n=2$

$i=0.08$

Using the yearly means

$A=P(1+i)^n$

$10,000=P(1+0.08)^2$

$10,000=P(1.08)^2$

$10,000=1.1664P$

$P=8,573.38$