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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%
p.a. 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?
Most Upvoted Answer
?Appu retires at 60 years receiving a pension of 14,400 a year paid in...
Calculation of Present Value of Pension

First, we need to calculate the present value of the pension using the formula:

PV = C * ((1 - (1 + r)^(-n)) / r)

Where PV is the present value, C is the annual payment, r is the interest rate, and n is the number of payments.

In this case, C is 14,400/2 = 7,200 (since the pension is paid half-yearly), r is 4%/2 = 0.02 (since interest is paid half-yearly), and n is 13*2 = 26 (since there are 26 half-yearly payments in 13 years).

Therefore, PV = 7,200 * ((1 - (1 + 0.02)^(-26)) / 0.02) = 1,44,900

Hence, the single sum equivalent to Appu's pension is 1,44,900.

Final Answer: (B) 1,44,900
Community Answer
?Appu retires at 60 years receiving a pension of 14,400 a year paid in...
B
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?Appu retires at 60 years receiving a pension of 14,400 a year paid in half-yearly installmentsfor rest of his life after reckoning his life expectation to be 13 years and that interest at 4%p.a. 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 installmentsfor rest of his life after reckoning his life expectation to be 13 years and that interest at 4%p.a. 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 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 ?Appu retires at 60 years receiving a pension of 14,400 a year paid in half-yearly installmentsfor rest of his life after reckoning his life expectation to be 13 years and that interest at 4%p.a. 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 CA Foundation 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 installmentsfor rest of his life after reckoning his life expectation to be 13 years and that interest at 4%p.a. 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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