Question

What is the present value of rs 10,00,000 receivable 30 years from now if the discount rate is 10%?

Answer 1

Answer:

rs 57,308.55

Explanation:

The formula for discounting is given as;

$PV= \frac{Pt}{(1+d)^{t} }$

where Pt is the amount at time t and d is the discounting rate.

Therefore;

$PV= 1000000*(1+0.1)^{-30\\} = 57,308.5533$