1. **Problem:** Calculate the present value (PV) of Rs.100000 to be received two years from now with a discount rate of 8%. 2. **Formula:** The present value of a single future cash flow is given by: $$PV = \frac{FV}{(1 + r)^n}$$ where $FV$ is the future value, $r$ is the discount rate, and $n$ is the number of periods. 3. **Calculation:** $$PV = \frac{100000}{(1 + 0.08)^2} = \frac{100000}{1.08^2} = \frac{100000}{1.1664} \approx 85734.51$$ 4. **Explanation:** We discount the future amount back to the present by dividing by the growth factor $(1 + r)^n$. This accounts for the time value of money, meaning money today is worth more than the same amount in the future. **Final answer:** The present value of Rs.100000 received two years from now at 8% discount rate is approximately Rs.85734.51.