Question
What is the present value of ₹1,00,000 receivable
after 5 years, if the discount rate is 12% p.a. compounded annually?Solution
PV = FV / (1 + r)n = 1,00,000 / (1.12)5 = 1,00,000 / 1.7623 ≈ ₹56,734
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