{"id":51631,"date":"2024-04-15T23:27:35","date_gmt":"2024-04-15T23:27:35","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=51631"},"modified":"2024-04-15T23:27:35","modified_gmt":"2024-04-15T23:27:35","slug":"if-security-pays-rs-5000-in-20-years-with-7-annual-interest-rate-pv-of-security-by-using-formula-is","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/if-security-pays-rs-5000-in-20-years-with-7-annual-interest-rate-pv-of-security-by-using-formula-is\/","title":{"rendered":"If security pays Rs 5,000 in 20 years with 7% annual interest rate, PV of security by using formula is"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;Rs 1,290.10&#8243; option2=&#8221;Rs 1,292.10&#8243; option3=&#8221;Rs 1,295.10&#8243; option4=&#8221;Rs 1,297.10&#8243; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is A. Rs 1,290.10.<\/p>\n<p>The present value (PV) of a security is the amount of money that would need to be invested today in order to have the desired amount of money in the future, given a certain interest rate. The formula for calculating the PV of a security is:<\/p>\n<p>PV = FV \/ (1 + r)^n<\/p>\n<p>where:<\/p>\n<ul>\n<li>PV = present value<\/li>\n<li>FV = future value<\/li>\n<li>r = interest rate<\/li>\n<li>n = number of years<\/li>\n<\/ul>\n<p>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:<\/p>\n<p>PV = 5000 \/ (1 + 0.07)^20 = 1290.10<\/p>\n<p>Therefore, the PV of the security is Rs 1,290.10.<\/p>\n<p>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.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;Rs 1,290.10&#8243; option2=&#8221;Rs 1,292.10&#8243; option3=&#8221;Rs 1,295.10&#8243; option4=&#8221;Rs 1,297.10&#8243; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-51631","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>If security pays Rs 5,000 in 20 years with 7% annual interest rate, PV of security by using formula is<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/if-security-pays-rs-5000-in-20-years-with-7-annual-interest-rate-pv-of-security-by-using-formula-is\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"If security pays Rs 5,000 in 20 years with 7% annual interest rate, PV of security by using formula is\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;Rs 1,290.10&#8243; 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