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Question
Fill in the blank :
If payments of an annuity fall due at the end of every period, the series is called annuity __________.
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Solution
If payments of an annuity fall due at the end of every period, the series is called annuity immediate.
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Fill in the blank :
If payments of an annuity fall due at the beginning of every period, the series is called annuity __________.
State whether the following is True or False :
Payment of every annuity is called an installment.
State whether the following is True or False :
The present value of an annuity is the sum of the present value of all installments.
Solve the following :
Find the present value of an annuity immediate of ₹20,000 per annum for 3 years at 10% p.a. compounded annually. [(1.1)–3 = 0.7513]
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Rental payment for an apartment is an example of ______
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The future value of an annuity is the accumulated values of all instalments
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Annuity contingent begins and ends on certain fixed dates
In ordinary annuity, payments or receipts occur at ______
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If for an immediate annuity r = 10% p.a., P = ₹ 12,679.46 and A = ₹ 18,564, then the amount of each annuity paid is ______
If payments of an annuity fall due at the beginning of every period, the series is called annuity ______
The intervening time between payment of two successive installments is called as ______
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[Given (1.1)4 = 1.4641]
For an annuity due, C = ₹ 2000, rate = 16% p.a. compounded quarterly for 1 year
∴ Rate of interest per quarter = `square/4` = 4
⇒ r = 4%
⇒ i = `square/100 = 4/100` = 0.04
n = Number of quarters
= 4 × 1
= `square`
⇒ P' = `(C(1 + i))/i [1 - (1 + i)^-n]`
⇒ P' = `(square(1 + square))/0.04 [1 - (square + 0.04)^-square]`
= `(2000(square))/square [1 - (square)^-4]`
= 50,000`(square)`[1 – 0.8548]
= ₹ 7,550.40
