A lady plans to save for her daughter’s marriage. She wishes to accumulate a sum of ₹4,64,100 at the end of 4 years. What amount should she invest every year if she gets an interest of 10% p.a. - Mathematics and Statistics

Sum

A lady plans to save for her daughter’s marriage. She wishes to accumulate a sum of ₹4,64,100 at the end of 4 years. What amount should she invest every year if she gets an interest of 10% p.a. compounded annually? [Given (1.1)4 = 1.4641]

Solution

Given, A = ₹4,64,100, n = 4 years, r = 10% p.a.

i = "r"/(100) = (10)/(100) = 0.1

Now, A = "C"/"i"[(1 + "i")^"n" - 1]

∴ 4,64,100 = "C"/(0.1)[(1 + 0.1)^4 - 1]

∴ 4,64,100(0.1) C[(1.1)4 – 1]
∴ 46,410 = C[1.4641 – 1]
∴ 46,410 = C(0.4641)
∴ C = (46,410)/(0.4641)
∴ C = 1,00,000
∴ She must invest ₹1,00,000 every year.

Concept: Annuity
Is there an error in this question or solution?

APPEARS IN

Balbharati Mathematics and Statistics 2 (Commerce) 12th Standard HSC Maharashtra State Board
Chapter 2 Insurance and Annuity
Exercise 2.2 | Q 1.07 | Page 28