# A person wants to create a fund of ₹6,96,150 after 4 years at the time of his retirement. He decides to invest a fixed amount at the end of every year in a bank that offers him interest of 10% p.a. - Mathematics and Statistics

Sum

A person wants to create a fund of ₹6,96,150 after 4 years at the time of his retirement. He decides to invest a fixed amount at the end of every year in a bank that offers him interest of 10% p.a. compounded annually. What amount should he invest every year? [Given (1.1)4 = 1.4641]

#### Solution

Given, A = ₹6,96,150, n = 4 years, r = 10% p.a.

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

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

∴ 6,96,150 = "C"/(0.1)[(1 + 0.1)^4 - 1]

∴ 6,96,150 x 0.1= C[(1.1)4 – 1]

∴ 69,615 = C[1.4641 – 1]
∴ 69,615 = C(0.4641)

∴ C = (69, 615)/(0.4641)
∴ C = 1,50,000
∴ Sum of ₹1,50,000 should be invested every year.

Concept: Annuity
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Chapter 2: Insurance and Annuity - Exercise 2.2 [Page 28]

#### APPEARS IN

Balbharati Mathematics and Statistics 2 (Commerce) 12th Standard HSC Maharashtra State Board
Chapter 2 Insurance and Annuity
Exercise 2.2 | Q 1.08 | Page 28
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