Question

If the discount rate is 12 % , the present value of Rs . X received at the end of each year for the next four years is equals to ?
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Answer 1

Answer:

3.04x

Step-by-step explanation

find present value of year 1,2,3 and 4 respectively

year 1  ⇒     x/1+0.12 =0.8928x

year 2  ⇒    x/(1+0.12)²= 0.7971x

year 3  ⇒    x/(1+0.12)³=0.7117x

year 4  ⇒    x/(1+0.12)⁴=0.6355x

now add all of them we get

3.04x