Maharashtra State BoardHSC Commerce 12th Board Exam
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Solve the following : Find the amount a company should set aside at the end of every year if it wants to buy a machine expected to cost ₹1,00,000 at the end of 4 years - Mathematics and Statistics

Sum

Solve the following :

Find the amount a company should set aside at the end of every year if it wants to buy a machine expected to cost ₹1,00,000 at the end of 4 years and interest rate is 5% p. a. compounded annually. [(1.05)4 = 1.21550625]

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Solution

Given, A = ₹1,00,000, n = 4 years, r = 5% p.a.

∴ i = `"r"/(100) = (5)/(100)`  = 0.05

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

∴ 1,00,000 = `"C"/(0.05)[(1 + 0.05)^4 - 1]`

∴ 1,00,000  x 0.05 = C[(1.05)4 – 1]
∴ 5,000 = C(1.21550625 – 1)
∴ 5,000 = C x 0.21550625

∴ C = `(5000)/(0.21550625)`
∴ C = ₹23,201.18
∴ The company should set aside a sum of ₹23,201.18 in order to buy the machine.

Concept: Annuity
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APPEARS IN

Balbharati Mathematics and Statistics 2 (Commerce) 12th Standard HSC Maharashtra State Board
Chapter 2 Insurance and Annuity
Miscellaneous Exercise 2 | Q 4.15 | Page 31
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