Discussion
What is the present worth of Rs. 132 due in 2 years at 5% simple interest per annum?
Answer: C
Present worth is the sum that would grow to Rs. 132 over the two years.
\[ \text{PW}\left(1 + \frac{5 \times 2}{100}\right) = 132 \]
\[ 1.1 \times \text{PW} = 132 \quad\Longrightarrow\quad \text{PW} = \text{Rs. } 120 \]
Taking 10% off Rs. 132 would give Rs. 118.80 - the second option, and wrong, because the interest accrues on the present worth, not on the future amount.
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