RFL Company expects to receive taka 1,00,000 for a period of 10 years from a new project 
it has just undertaken. Assuming a 10 percent rate of interest, how much would be the 
present value of this investment?

To find the **present value (PV)** of an investment that pays \(1,00,000\) Taka annually for 10 years at a 10% interest rate, we can use the formula for the present value of an annuity:

\[
PV = P \times \left( \frac{1 - (1 + r)^{-n}}{r} \right)
\]

Where:
- \(P = 1,00,000\) Taka (annual payment),
- \(r = 10\%\) or 0.10 (interest rate per period),
- \(n = 10\) years (number of periods).

Now, let's calculate the present value.

\[
PV = 1,00,000 \times \left( \frac{1 - (1 + 0.10)^{-10}}{0.10} \right)
\]

First, compute the term \((1 + 0.10)^{-10}\):

\[
(1 + 0.10)^{-10} = 1.10^{-10} \approx 0.3855
\]

Now, substitute into the equation:

\[
PV = 1,00,000 \times \left( \frac{1 - 0.3855}{0.10} \right)
\]

\[
PV = 1,00,000 \times \left( \frac{0.6145}{0.10} \right)
\]

\[
PV = 1,00,000 \times 6.145 = 6,14,500
\]

Therefore, the present value of this investment is approximately **6,14,500 Taka**.

Would you like more details or have any questions?

Here are some related questions you may find useful:
1. What is the difference between present value and future value?
2. How does the interest rate affect the present value calculation?
3. What is the formula for calculating the future value of an annuity?
4. How would the present value change if the interest rate were higher?
5. Can this formula be used for irregular payments?

**Tip**: When calculating present value, higher interest rates will decrease the present value, while lower rates will increase it.

RFL Company expects to receive taka 1,00,000 for a period of 10 years from a new project it has just undertaken. Assuming a 10 percent rate of interest, how much would be the present value of this investment?

Calculate the present value of an investment that pays 1,00,000 Taka annually for 10 years at a 10% interest rate. Using the present value of annuities formula, learn how to derive the final present value, approximately 6,14,500 Taka. Suitable for college-level finance and mathematics students.

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