Ashok is to receive an amount of Rs. 15,00,000 from his relative after 3 years. He wants to buy a house for which he wants the money to be paid now. His relative had already invested the money at the rate of 9.25%. Calculate how much money Ashok will get now?
To calculate the present value of the future amount, we need to use the formula for calculating the present value of a future sum of money:
Present Value = Future Value / (1 + (Interest Rate * Time))
In this case, the future value Ashok is set to receive is Rs. 15,00,000. The interest rate is 9.25%, which means the decimal representation is 0.0925. The time is 3 years. Now we can plug in these values into the formula to find the present value:
Present Value = 15,00,000 / (1 + (0.0925 * 3))
Calculating this equation will give us the amount of money Ashok will receive now.