Question

For an immediate annuity paid for 3 years with interest compounded at 10% p.a.  its present value is ₹ 10,000. What is its accumulated value after 3 years. 

[Given: (1.1)³ = 1.331)].

Answer 1

Given P = 10.000 

r = 10% p.a. 

n = 3 years 

`therefore "i" = "r"/100 = 10/100`

= 0.1

A = P (1 + i)ⁿ

A = 10,000 ( l + 0.1)³ 

= 10,000 ( 1.1 )³ 

= 10,000 ( 1.331) 

= 13,310 

∴ Accumulated value after 3 years is ₹ 13.310