Question

Find accumulated value after 1 year of annuity immediate in which Rs 20,000 is invested every quarter, at .16% p.a. compounded quarterly.
[Given : (1.04)⁴ = 1.1699]

Answer 1

C = 20,000; n = 4; rate = 16% p.a

r = `16/4` % per quater
r = 4%
i = `r/100` =0.04

Accumulated value A = `C/i [(1 + i)^n  -1]`

                                   = `20000/(0.04) [( 1 + 0.04)^4 -1]`

                                   = 5,00,000 [(1.04)⁴ - 1]

                                   = 5,00,000 [1.1699 -1]

                                   = 5,00,000 [0.1699]

                               A  = Rs 84,950