Suppose interest is compounded half-yearly at the rate of 10% per annum. If the present value of an asset which returns a fixed sum of Rs after one year and nothing thereafter is Rs 50,000, then is equal to
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1 mark, −0.5MacroeconomicsTime value of money and bond pricingPresent value, discounting and compoundingModerateabout 1 min
JNU SSS 2010 Question 34: Time value of money and bond pricing
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Suppose interest is compounded half-yearly at the rate of 10% per annum. If the present value of an asset which returns a fixed sum of Rs X after one year and nothing thereafter is Rs 50,000, then X is equal to (A) Rs 54,875 (B) Rs 55,000 (C) Rs 55,125 (D) Rs 55,250
Time value of money and bond pricing has come up 20 times in 5 exams since 2010.
What this question tests
This question is on Present value, discounting and compounding, part of Time value of money and bond pricing in Macroeconomics.
Comparing money at different dates.
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