business mathematics

General Concept:

Suppose a man has to pay Rs.156 after 4 years and the rate of interest is 14%per annum.
Clearly ,Rs.100 at 14% will amount to Rs156 in 4 years
So,the payment of Rs.100 now wil cear off the debt of Rs156 due 4 years hence
We say that Sum due = Rs156 due 4 years hence Present Worth =Rs100
True Discount=Rs.156-Rs100=Rs56=Sumdue-PW
We define
TrueDiscount= Interest on Present Worth(PW) Amount = PresentWorth+TrueDiscount

Formulae:

Let rate=R%per annum, Time= T years

1.Present worth (PW) = (100*Amount)/(100+(R*T))
= (100* TrueDiscount)/(R*T)

2.TrueDiscount (TD) = (P.W*R*T)/100
= (Amount*R*T)/(100+(R*T))

3.Sum =(SimpeInterest*TrueDiscount)/(SimpleInterest-TrueDiscount)

4.SimpleInterest-TrueDiscount=SimpeInterest on TrueDiscount

5.When the sum is put at CompoundInterest,then

PresentWorth=Amount/(1+(R/100))^T