Find the present value of Rs2000 due in 6 years if money is worth compounded semi annual
looks like you need some interest rate info. In any case,
A = P(1 + r/n)^(nt)
where you want to find P.
To find the present value of Rs2000 due in 6 years with semiannual compounding, we need to use the formula for the present value of a future sum compounded semiannually.
The formula is:
PV = FV / (1 + r/n)^(n*t)
Where:
PV = Present Value
FV = Future Value (Rs2000 in this case)
r = Annual interest rate (in decimal form)
n = Number of compounding periods per year (2 in this case, since it's semiannual)
t = Number of years
Let's assume the annual interest rate is 6%.
First, convert the annual interest rate to decimal form: 6% = 0.06
Next, substitute the values into the formula:
PV = 2000 / (1 + 0.06/2)^(2*6)
Now, simplify the formula:
PV = 2000 / (1 + 0.03)^(12)
Calculate the value inside the parentheses:
PV = 2000 / (1.03)^(12)
Now, use a calculator to calculate the value inside the parentheses:
PV = 2000 / (1.425761887)
Finally, solve for the present value:
PV ≈ Rs 1404.29
So, the present value of Rs2000 due in 6 years with semiannual compounding at an annual interest rate of 6% is approximately Rs 1404.29.