Find the present worth of Rs. 1,404 due in two equal half-yearly instalments at 8% p.a. simple interest.

Given data

• Total due = Rs. 1,404 split equally into two instalments
• Each instalment = Rs. 702
• Due times: 0.5 year and 1 year from now
• Rate r = 8% p.a.

Concept / Approach

Discount each instalment to present under simple interest and add: PW = Σ [Instalment / (1 + r × t_i)]

Computation
PW = 702/1.04 + 702/1.08= 675 + 650 = 1,325

Verification

Final Answer
Present worth = Rs. 1,325.