Answer:
The Present value of investment is Rs 2492442 , option B
Step-by-step explanation:
Given as :
The future value of investment after 20 years = f = Rs 200000
The Time period = n =20 years
The rate of interest applied = r = 5% = .05
Let The present value of investment = P
Now, From Equation
Present value = Future value × [ [tex]\dfrac{1 - (1 +r)^{-n}}{r}[/tex] ]
or, P = f × [ [tex]\dfrac{1 - (1 -r)^{-n}}{r}[/tex] ]
Or, P = Rs 200000 × [ [tex]\dfrac{1 - (1 +0.05)^{-20}}{0.05}[/tex] ]
Or, P = Rs 200000 × [tex]\frac{1-0.376889482}{.05}[/tex]
Or, P = Rs 200000 × [tex]\dfrac{0.623110518}{0.05}[/tex]
Or, P = Rs 200000 × 12.46221036
Or, P = Rs 2492442.072
So, The present value = P = Rs 2492442
Hence, The Present value of investment is Rs 2492442 , option B . Answer
