Find the present worth (P.W.) and the true discount reckoning

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Find the present worth (P.W.) and the true discount reckoning 6 % per annum simple interest of $ 176 due in 20 months time.

1. $ 160, $ 16
2. $ 130, $ 46
3. $ 150, $ 26
4. None of these

Correct Option: A

Here , simple interest = $ 176 , Rate = 6% , Time = 20 months = ( 20/12 ) years

Present worth =	100 x 76
	100 + [ 2 x ( 20/12 ) ]

Present worth =	100 x 76	= $ 160
	100 + 10

True discount = Amount - Present worth
True discount = $ 176 - $ 160 = $ 16.