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**Fill in the blank :**

The person who receives annuity is called __________.

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#### Solution

The person who receives annuity is called **annuitant**.

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#### RELATED QUESTIONS

A person invested ₹ 5,000 every year in finance company that offered him interest compounded at 10% p.a., what is the amount accumulated after 4 years? [Given (1.1)^{4} = 1.4641]

Find the present value of an annuity immediate of ₹36,000 p.a. for 3 years at 9% p.a. compounded annually. [Given (1.09)^{−3} = 0.7722]

Find the present value of an ordinary annuity of ₹63,000 p.a. for 4 years at 14% p.a. compounded annually. [Given (1.14)^{−4} = 0.5921]

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]

Find the number of years for which an annuity of ₹500 is paid at the end of every year, if the accumulated amount works out to be ₹1,655 when interest is compounded annually at 10% p.a.

**Choose the correct alternative :**

Amount of money today which is equal to series of payments in future is called

In an ordinary annuity, payments or receipts occur at ______.

**State whether the following is True or False :**

The future value of an annuity is the accumulated values of all installments.

**State whether the following is True or False :**

Sinking fund is set aside at the beginning of a business.

**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]

**Solve the following :**

A company decides to set aside a certain amount at the end of every year to create a sinking fund that should amount to ₹9,28,200 in 4 years at 10% p.a. Find the amount to be set aside every year. [(1.1)^{4} = 1.4641]

**Multiple choice questions:**

Rental payment for an apartment is an example of ______

**Multiple choice questions:**

The present value of an immediate annuity of ₹ 10,000 paid each quarter for four quarters at 16% p.a. compounded quarterly is ______

**State whether the following statement is True or False:**

A sinking fund is a fund established by financial organization

**State whether the following statement is True or False:**

The relation between accumulated value ‘A’ and present value ‘P’ is A = P(1+ i)^{n}

**State whether the following statement is True or False:**

An annuity where payments continue forever is called perpetuity

In ordinary annuity, payments or receipts occur at ______

The present value of an immediate annuity for 4 years at 10% p.a. compounded annually is ₹ 23,400. It’s accumulated value after 4 years would be ₹ ______

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 ______

An annuity in which each payment is made at the end of period is called ______

A company decides to set aside a certain sum at the end of each year to create a sinking fund, which should amount to ₹ 4 lakhs in 4 years at 10% p.a. Find the amount to be set aside each year?

[Given (1.1)^{4} = 1.4641]

For annuity due,

C = ₹ 20,000, n = 3, I = 0.1, (1.1)^{–3} = 0.7513

Therefore, P = `square/0.1 xx [1 - (1 + 0.1)^square]`

= 2,00,000 [1 – 0.7513]

= ₹ `square`

The future amount, A = ₹ 10,00,000

Period, n = 20, r = 5%, (1.025)^{20} = 1.675

A = `"C"/"I" [(1 + "i")^"n" - 1]`

I = `5/200` = `square` as interest is calculated semi-annually

A = 10,00,000 = `"C"/"I" [(1 + "i")^"n" - 1]`

10,00,000 = `"C"/0.025 [(1 + 0.025)^square - 1]`

= `"C"/0.025 [1.675 - 1]`

10,00,000 = `("C" xx 0.675)/0.025`

C = ₹ `square`

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