Beginning from the end of 6 years from now a person has right of 350 annum for 8 years and 250 per annum for next 6 years. What is the present of his rights assuming interest rate of 5% per annum?
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Answer:
Step-by-step explanation:
SIMPLE ONE-TIME INTEREST
I
=
P
0
r
A
=
P
0
+
I
=
P
0
+
P
0
r
=
P
0
(
1
+
r
)
I is the interest
A is the end amount: principal plus interest
P
0
is the principal (starting amount)
r is the interest rate (in decimal form. Example: 5% = 0.05)
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