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
The present worth of a sum due later is the amount which, put out now at the given rate, grows to that sum by the due date. At simple interest, every ₹100 grows to \(100+3\times5=115\) in 3 years at 5%.
Amount for ₹100 in 3 years: ₹115
Present worth of ₹161 \(\displaystyle =161\times\frac{100}{115}=140\)