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Appu retires at 60 years receiving a pension of 14,400 a year paid in half-yearly installments for rest of his life after reckoning his life expectation to be 13 years and that interest at 4% pa is payable half-yearly. What single sum is equivalent to his pension? (a) 1,45,000 (b) 1,44,900 (c) 1,44,800 (d) 1,44,700?
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Appu retires at 60 years receiving a pension of 14,400 a year paid in ...
Calculation of Present Value of Pension:
To calculate the present value of the pension, we need to use the formula for present value of an annuity:
PV = C * [(1 - (1 + r)^-n) / r]
where PV is the present value, C is the annual payment, r is the interest rate per period, and n is the total number of periods.

Given Data:
- Annual pension payment (C) = 14,400
- Interest rate (r) = 4% or 0.04 per half-year
- Number of periods (n) = 13 years or 26 half-years

Calculation:
- Substitute the values into the formula:
PV = 14,400 * [(1 - (1 + 0.04)^-26) / 0.04]
PV = 14,400 * [(1 - (1.04)^-26) / 0.04]
PV = 14,400 * [(1 - 0.5663) / 0.04]
PV = 14,400 * [0.4337 / 0.04]
PV = 14,400 * 10.8425
PV = 1,55,886.5
Therefore, the present value of the pension is 1,55,886.5. Since the pension is paid in half-yearly installments, the equivalent single sum is slightly lower than this amount.

Equivalent Single Sum:
The equivalent single sum is the present value of the pension. Therefore, the closest option is (a) 1,45,000, which is the nearest rounded value to 1,55,886.5.
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Appu retires at 60 years receiving a pension of 14,400 a year paid in half-yearly installments for rest of his life after reckoning his life expectation to be 13 years and that interest at 4% pa is payable half-yearly. What single sum is equivalent to his pension? (a) 1,45,000 (b) 1,44,900 (c) 1,44,800 (d) 1,44,700?
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Appu retires at 60 years receiving a pension of 14,400 a year paid in half-yearly installments for rest of his life after reckoning his life expectation to be 13 years and that interest at 4% pa is payable half-yearly. What single sum is equivalent to his pension? (a) 1,45,000 (b) 1,44,900 (c) 1,44,800 (d) 1,44,700? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Appu retires at 60 years receiving a pension of 14,400 a year paid in half-yearly installments for rest of his life after reckoning his life expectation to be 13 years and that interest at 4% pa is payable half-yearly. What single sum is equivalent to his pension? (a) 1,45,000 (b) 1,44,900 (c) 1,44,800 (d) 1,44,700? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Appu retires at 60 years receiving a pension of 14,400 a year paid in half-yearly installments for rest of his life after reckoning his life expectation to be 13 years and that interest at 4% pa is payable half-yearly. What single sum is equivalent to his pension? (a) 1,45,000 (b) 1,44,900 (c) 1,44,800 (d) 1,44,700?.
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