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The present value of an annuity of rs3000 for 15 years at 4.5% pa ci is?
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The present value of an annuity of rs3000 for 15 years at 4.5% pa ci i...
Calculating Present Value of Annuity
Given:
Annuity amount (A) = Rs. 3000
Number of years (n) = 15
Rate of interest (r) = 4.5% pa compounded annually
Annuity amount (A) = Rs. 3000
Number of years (n) = 15
Rate of interest (r) = 4.5% pa compounded annually
Step 1: Calculate the Present Value Interest Factor (PVIF)
PVIF is the factor that helps to calculate the present value of annuity. It is calculated using the formula:
PVIF = 1 / (1 + r)^n
PVIF = 1 / (1 + r)^n
Substituting the given values:
PVIF = 1 / (1 + 0.045)^15
PVIF = 0.4442
PVIF = 1 / (1 + 0.045)^15
PVIF = 0.4442
Step 2: Calculate the Present Value of Annuity (PVA)
PVA is the present value of the annuity amount. It is calculated using the formula:
PVA = A * PVIF
PVA = A * PVIF
Substituting the given values:
PVA = Rs. 3000 * 0.4442
PVA = Rs. 1332.60
PVA = Rs. 3000 * 0.4442
PVA = Rs. 1332.60
Explanation
The present value of an annuity is the current value of a series of equal payments made at regular intervals over a specified period of time. In this case, the annuity amount is Rs. 3000 and it is paid for 15 years at a rate of 4.5% pa compounded annually. The present value of annuity is calculated by finding the present value interest factor (PVIF) and multiplying it by the annuity amount.
The PVIF is calculated using the formula 1 / (1 + r)^n. Here, r is the rate of interest and n is the number of years. After calculating the PVIF, it is multiplied by the annuity amount to get the present value of annuity (PVA).
Therefore, the present value of an annuity of Rs. 3000 for 15 years at 4.5% pa compounded annually is Rs. 1332.60.
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The present value of an annuity of rs3000 for 15 years at 4.5% pa ci i...
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The present value of an annuity of rs3000 for 15 years at 4.5% pa ci is?
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The present value of an annuity of rs3000 for 15 years at 4.5% pa ci is? 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 The present value of an annuity of rs3000 for 15 years at 4.5% pa ci is? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The present value of an annuity of rs3000 for 15 years at 4.5% pa ci is?.
The present value of an annuity of rs3000 for 15 years at 4.5% pa ci is? 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 The present value of an annuity of rs3000 for 15 years at 4.5% pa ci is? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The present value of an annuity of rs3000 for 15 years at 4.5% pa ci is?.
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