Question

You are planning to withdraw $100 in year 1,$150 in year 3,and $ 200 in year 5.At a interest .Rate of 5%.What is present worth of these withdrawl

Answer 1

100 rs in first year :

time :

after 5 years

rate of interest :

5%

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$\bold{simple \: interest : } \\ \\ \bold{ \frac{ p\times t\times r}{100} } \\ \\ here : \\ \\ p \: = \: principle \: \\ \\ r \: = \: rate \: of \: interest \: \\ \\ t \: = \: time \:$ ____________________________

$amount \: = simple \: interest \: + \: principle \: \\ \\ amount \: = \: 100 \: + \frac{100 \times 5 \times 5}{100} \\ \\ amount \: = 100 + \: 25 \: rs \: \\ \\ amount \: = \: 125 \: rs \:$

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150 rs in the third year :

time :

3 yrs

rate of interest :

5 %

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amount = principle + simple interest

$amount \: = 150 \: + \: \frac{150 \times 3 \times 5}{100} \\ \\ amount \: = 150 + \: \frac{45}{2} \\ \\ amount \: = \: 150 \: + \: 22.5 \: rs \: \\ \\ amount \: = \: 172.5 \: rs \: \:$

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200 in 5th year :

time :

1 yr

rate of interest :

5 %

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amount = principle + simple interest

$amount \: = \: 200 \: + \: \frac{200 \times 5 \times 1}{100} \\ \\ amount \: = \: 200 \: + \: 10 \\ \\ amount \: = \: 210 \: rs$
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total amount after 5 yrs :

125 + 172.5 + 210 rs

507.5 rs

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$\bold{present \: worth \: of \: this \: withdrawl }\\ \\\bold{is \: rs \: 507.5 \: rs \: }$

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