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What will be the present worth of ₹ 169 due in 2 yr at 4 % pa compound interest?

Correct Answer: ₹ 156.25

Explanation:

Given R = 4 %, n = 2 yr and A = ₹ 169.
P = ?
Amount = P(1 + R/100)n
⇒ 169 = P(1 + 4/100 )2
⇒ 169 = P(26/25)2
⇒ P = 169 x (25 x 25)/(26 x 26)
∴ P = 105625 / 676
= ₹ 156.25


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