alleryThe present value of Rs.1100 due in 1 year at 10% per annum is
ARs.1000
BRs.1100
CRs.1010
DRs.990
Answer & Solution
Correct answer: A. Rs.1000
1. PV = FV / (1 + r)^n.
2. PV = 1100 / 1.10 = 1000.
3. Discounting Rs.1100 by 1 year at 10% reduces it to Rs.1000.
4. So the present value is Rs.1000.
_Source: ICAI BoS Foundation Paper 3, Ch 4 'Math of Finance', p.12_
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