A trader owes a merchant ₹10,500 due in one year. The trader wants to settle the account after four months. If the rate of interest is 6% per annum, then how much should he pay (rounded off value)?

Correct option is D

Given:

Future value = 10,500

Rate of Intrest = 6% or 0.06

Time = 4 month  

due month(t) = 12 - 4 = 8 month 

Formula used:

Present Value (PV) = $$\frac{FV}{1 + \frac{r\cdot t}{100}}$$ 

t is for due months 

Solution:

Substitute the value in the above formula:

​$$PV = \frac{10,500}{1 + 0.06 \times \frac{2}{3}}$$  

$$PV = \frac{10,500}{1.04} \approx 10,096$$ 

$$PV \approx ₹10,096$$ 

Thus the correct answer is option(d) ₹10,096

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