Suppose an asset provides returns of Rs 315 after one year, Rs after two years and Rs after three years and nothing thereafter. If interest is compounded yearly and the rate of interest is 5% per annum, what is the present discounted value of the asset?
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Suppose an asset provides returns of Rs 315 after one year, Rs 661· 50 after two years and Rs 1389· 15 after three years and nothing thereafter. If interest is compounded yearly and the rate of interest is 5% per annum, what is the present discounted value of the asset? (A) Rs 2,050 (B) Rs 2,100 (C) Rs 2,200 (D) Rs 2,250
Also written as: Suppose an asset provides returns of Rs 315 after one year, Rs 661* 50 after two years and Rs 1389* 15 after three years and nothing thereafter. If interest is compounded yearly and the rate of interest is 5% per annum, what is the present discounted value of the asset?
Time value of money and bond pricing has come up 20 times in 5 exams since 2010.
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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Question from the JNU SSS 2010 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.