CA Foundation Exam  >  CA Foundation Questions  >  Suppose your father decides to gift you Rs.10... Start Learning for Free
Suppose your father decides to gift you Rs.10 000 every year starting from today for the next five years you deposit this amount in a bank as and when you receive and get 10% per annum interest fata compounded annually.What is the present value of this annuity? (a) Rs.41 698.70 (b) Rs.45 698.70 (c) Rs.42 698.70 (d) Rs.43 698.70?
Most Upvoted Answer
Suppose your father decides to gift you Rs.10 000 every year starting ...
Calculation of Present Value of Annuity:
1. Formula Used:
- The formula used to calculate the present value of an annuity is:
PV = A x [(1 - (1 + r)^-n) / r]
where PV is the present value of the annuity, A is the annual payment, r is the interest rate per period, and n is the number of periods.
2. Given Data:
- Annual payment (A) = Rs.10,000
- Interest rate (r) = 10% per annum
- Number of years (n) = 5
3. Calculation:
- Substitute the given values into the formula:
PV = 10,000 x [(1 - (1 + 0.10)^-5) / 0.10]
PV = 10,000 x [(1 - 0.6209213230591549) / 0.10]
PV = 10,000 x [0.3790786769408451 / 0.10]
PV = 10,000 x 3.790786769408451
PV = Rs.37,907.87
4. Conclusion:
- Therefore, the present value of the annuity is Rs.37,907.87.
- The correct option is not provided in the question, but the closest option is (c) Rs.42,698.70.
Explore Courses for CA Foundation exam
Suppose your father decides to gift you Rs.10 000 every year starting from today for the next five years you deposit this amount in a bank as and when you receive and get 10% per annum interest fata compounded annually.What is the present value of this annuity? (a) Rs.41 698.70 (b) Rs.45 698.70 (c) Rs.42 698.70 (d) Rs.43 698.70?
Question Description
Suppose your father decides to gift you Rs.10 000 every year starting from today for the next five years you deposit this amount in a bank as and when you receive and get 10% per annum interest fata compounded annually.What is the present value of this annuity? (a) Rs.41 698.70 (b) Rs.45 698.70 (c) Rs.42 698.70 (d) Rs.43 698.70? 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 Suppose your father decides to gift you Rs.10 000 every year starting from today for the next five years you deposit this amount in a bank as and when you receive and get 10% per annum interest fata compounded annually.What is the present value of this annuity? (a) Rs.41 698.70 (b) Rs.45 698.70 (c) Rs.42 698.70 (d) Rs.43 698.70? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suppose your father decides to gift you Rs.10 000 every year starting from today for the next five years you deposit this amount in a bank as and when you receive and get 10% per annum interest fata compounded annually.What is the present value of this annuity? (a) Rs.41 698.70 (b) Rs.45 698.70 (c) Rs.42 698.70 (d) Rs.43 698.70?.
Solutions for Suppose your father decides to gift you Rs.10 000 every year starting from today for the next five years you deposit this amount in a bank as and when you receive and get 10% per annum interest fata compounded annually.What is the present value of this annuity? (a) Rs.41 698.70 (b) Rs.45 698.70 (c) Rs.42 698.70 (d) Rs.43 698.70? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Suppose your father decides to gift you Rs.10 000 every year starting from today for the next five years you deposit this amount in a bank as and when you receive and get 10% per annum interest fata compounded annually.What is the present value of this annuity? (a) Rs.41 698.70 (b) Rs.45 698.70 (c) Rs.42 698.70 (d) Rs.43 698.70? defined & explained in the simplest way possible. Besides giving the explanation of Suppose your father decides to gift you Rs.10 000 every year starting from today for the next five years you deposit this amount in a bank as and when you receive and get 10% per annum interest fata compounded annually.What is the present value of this annuity? (a) Rs.41 698.70 (b) Rs.45 698.70 (c) Rs.42 698.70 (d) Rs.43 698.70?, a detailed solution for Suppose your father decides to gift you Rs.10 000 every year starting from today for the next five years you deposit this amount in a bank as and when you receive and get 10% per annum interest fata compounded annually.What is the present value of this annuity? (a) Rs.41 698.70 (b) Rs.45 698.70 (c) Rs.42 698.70 (d) Rs.43 698.70? has been provided alongside types of Suppose your father decides to gift you Rs.10 000 every year starting from today for the next five years you deposit this amount in a bank as and when you receive and get 10% per annum interest fata compounded annually.What is the present value of this annuity? (a) Rs.41 698.70 (b) Rs.45 698.70 (c) Rs.42 698.70 (d) Rs.43 698.70? theory, EduRev gives you an ample number of questions to practice Suppose your father decides to gift you Rs.10 000 every year starting from today for the next five years you deposit this amount in a bank as and when you receive and get 10% per annum interest fata compounded annually.What is the present value of this annuity? (a) Rs.41 698.70 (b) Rs.45 698.70 (c) Rs.42 698.70 (d) Rs.43 698.70? tests, examples and also practice CA Foundation tests.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev