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What sum should be invested at the end of every year so as to accumulate an amount of Rs.7 96 870 at the end of 10 years at the rate of interest 10% compounded annually?
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What sum should be invested at the end of every year so as to accumula...
Calculation of Required Investment


To calculate the required investment at the end of every year, we can use the formula for the future value of an annuity:

FV = P * [(1 + r)^n - 1] / r

where FV is the future value, P is the periodic payment, r is the rate of interest, and n is the number of periods.

In this case, we know that:

- FV = Rs.7,96,870
- r = 10% compounded annually
- n = 10 years

By plugging these values into the formula, we can solve for P:

P = FV * r / [(1 + r)^n - 1]

P = Rs.7,96,870 * 0.1 / [(1 + 0.1)^10 - 1]

P = Rs.45,000 (rounded to the nearest thousand)

Therefore, an investment of Rs.45,000 at the end of every year for 10 years at a rate of 10% compounded annually will accumulate to Rs.7,96,870.

Explanation


The question requires us to find the periodic investment required to accumulate a certain amount over a specific period of time at a given rate of interest. To solve this problem, we can use the formula for the future value of an annuity, which relates the periodic investment to the future value of the investment.

In the formula, the future value is the amount that we want to accumulate, the rate of interest is the rate at which the investment grows, and the number of periods is the length of time over which the investment is made. The periodic investment is the unknown variable that we want to solve for.

By plugging in the given values for the future value, rate of interest, and number of periods, we can solve for the periodic investment required to achieve the desired future value. In this case, we find that an investment of Rs.45,000 at the end of every year for 10 years at a rate of 10% compounded annually will accumulate to Rs.7,96,870.
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What sum should be invested at the end of every year so as to accumulate an amount of Rs.7 96 870 at the end of 10 years at the rate of interest 10% compounded annually?
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What sum should be invested at the end of every year so as to accumulate an amount of Rs.7 96 870 at the end of 10 years at the rate of interest 10% compounded annually? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about What sum should be invested at the end of every year so as to accumulate an amount of Rs.7 96 870 at the end of 10 years at the rate of interest 10% compounded annually? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What sum should be invested at the end of every year so as to accumulate an amount of Rs.7 96 870 at the end of 10 years at the rate of interest 10% compounded annually?.
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