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A sum of money amounts to $1500 in 5 years at a certain rate of interest. If the

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Question: A sum of money amounts to $1500 in 5 years at a certain rate of interest. If the true discount is $300, what is the present worth?

Options:

  1. $1200
  2. $1300
  3. $1400
  4. $1500

Correct Answer: $1200

Solution: 

True Discount = Amount - Present Worth. Present Worth = 1500 - 300 = $1200.

A sum of money amounts to $1500 in 5 years at a certain rate of interest. If the

Practice Questions

Q1
A sum of money amounts to $1500 in 5 years at a certain rate of interest. If the true discount is $300, what is the present worth?
  1. $1200
  2. $1300
  3. $1400
  4. $1500

Questions & Step-by-Step Solutions

A sum of money amounts to $1500 in 5 years at a certain rate of interest. If the true discount is $300, what is the present worth?
  • True Discount – The difference between the amount and the present worth, representing the interest earned over time.
  • Present Worth – The current value of a sum of money that will amount to a specified value in the future, after accounting for interest.
  • Future Value – The amount of money that an investment will grow to over a period of time at a given interest rate.
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