If security pays Rs 5,000 in 20 years with 7% annual interest rate, PV of security by using formula is

PV = FV / (1 + r)^n

where:

• PV = present value
• FV = future value
• r = interest rate
• n = number of years

In this case, we are given that the security pays Rs 5,000 in 20 years with a 7% annual interest rate. Substituting these values into the formula, we get:

PV = 5000 / (1 + 0.07)^20 = 1290.10

Therefore, the PV of the security is Rs 1,290.10.

Option B is incorrect because it is the PV of a security that pays Rs 5,000 in 10 years with a 7% annual interest rate. Option C is incorrect because it is the PV of a security that pays Rs 5,000 in 15 years with a 7% annual interest rate. Option D is incorrect because it is the PV of a security that pays Rs 5,000 in 25 years with a 7% annual interest rate.