What is the present worth of ₹161 due in 3 years at 5% simple interest per annum?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹140
Given:
- Amount due (A) = ₹161
- Time (T) = 3 years
- Rate (R) = 5% per annum (Simple Interest)
Formula for Simple Interest:
$A = P \left(1 + \frac{RT}{100}\right)$
Substituting values:
$161 = P \left(1 + \frac{5 \times 3}{100}\right)$
$161 = P \left(1 + \frac{15}{100}\right)$
$161 = P \left(\frac{115}{100}\right)$
$P = \frac{161 \times 100}{115} = \frac{16100}{115} = ₹140$