Maharashtra State BoardHSC Commerce 12th Board Exam
Advertisement Remove all ads

Mrs. Menon Plans to Save for Her Daughter'S Marriage. - Mathematics and Statistics

Sum

Mrs. Menon plans to save for her daughter's marriage. She wants to accumulate a sum of ₹ 4,00,000 at the end of 4 years. How much should she invest at the end of each year from now, if she can get interest compounded at 10% p.a. ?

 [Given (1.1)4 = 1.4641]

Advertisement Remove all ads

Solution

Given A = ₹ 4,00,000 

Period (n) = 4 years 

Rate of interest (r) = 10% 

Annuity immediate (C) = ? 

i = `"r"/100 = 0/100 = 0.1`

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

`400000 xx 0.1 = "C" [(1.1)^4 - 1]`

40000 = C  [1.4641 - 1]

40000 = C [0.4641]

C = `40000/0.4641`

C = 86188.32

C = 86188

∴ Mrs. Menon should invest ₹ 86188 at the end of each year. 

Concept: Insurance and Annuity
  Is there an error in this question or solution?
Advertisement Remove all ads
Advertisement Remove all ads
Advertisement Remove all ads
Share
Notifications

View all notifications


      Forgot password?
View in app×