What is the present value of Rs 100,000 due in year 6, discounted at 12 percent?

The present value (PV) of Rs 100,000 due in 6 years at a discount rate of 12% can be calculated using the Present Value of a Single Sum formula:

$$PV=\frac{FV}{(1+r{)}^n}$$

Where:

• $FV=100,000$ (Future Value)
• $r=12\%=0.12$ (Discount rate)
• $n=6$ (Number of years)

Step-by-Step Calculation:

1. Calculate the discount factor: $$(1+0.12{)}^6=1.9738$$
2. Compute the present value: $$PV=\frac{100,000}{1.9738}=50,672.12$$

Final Answer: The present value is Rs 50,672.12.