What is the present value (in nearest round figure) of Tk. 1,000 due in 2 years @5% p.a. compounded half-yearly?

What is the present value (in nearest round figure) of Tk. 1,000 due in 2 years @5% p.a. compounded half-yearly?

A 906

B 1,006

C 995

D 1,010

Solution

Correct Answer: Option A

here, present value = 1000/(1+0.025)4 =905.95 tk