An amount of Rs.20,000 is due in three months.The present value if it includes simple interest @8% is:
19000
To find the present value of an amount due in the future, including simple interest, you can use the formula:
Present Value = Future Value / (1 + (Interest Rate * Time))
Here, the Future Value is Rs. 20,000, the Interest Rate is 8% (or 0.08), and the Time is 3 months (or 3/12 years).
Let's calculate the present value step by step:
Step 1: Calculate the future value by adding the simple interest to the principal amount.
Future Value = Principal + Interest
Future Value = Rs. 20,000 + (Rs. 20,000 * 0.08 * 3/12)
Future Value = Rs. 20,000 + Rs. 400
Future Value = Rs. 20,400
Step 2: Calculate the present value using the formula mentioned above.
Present Value = Rs. 20,400 / (1 + (0.08 * 3/12))
Present Value = Rs. 20,400 / (1 + 0.02)
Present Value = Rs. 20,400 / 1.02
Present Value = Rs. 20,000
Therefore, the present value of Rs.20,000 due in three months, including simple interest at a rate of 8%, is Rs.20,000.
To find the present value of an amount due in the future, taking into account simple interest, we need to use the formula for simple interest:
Simple Interest = Principal * Interest Rate * Time
Here, the Principal is the amount due, the Interest Rate is 8% (or 0.08 as a decimal), and the Time is 3 months (or 3/12 years).
Let's calculate the simple interest:
Simple Interest = Principal * Interest Rate * Time
= Rs.20,000 * 0.08 * (3/12)
= Rs.20,000 * 0.08 * 0.25
= Rs.400
The simple interest for this amount is Rs.400.
To find the present value, we subtract the simple interest from the future amount due:
Present Value = Future Amount - Simple Interest
= Rs.20,000 - Rs.400
= Rs.19,600
Therefore, the present value of the amount due, including simple interest at 8% for three months, is Rs.19,600.