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The present value of annuity of Rs. 5000 per annum for 12 years at 4% p.a C.I. annually is
- a)Rs. 46000
- b)Rs. 46850
- c)RS. 15000
- d)none of these
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
The present value of annuity of Rs. 5000 per annum for 12 years at 4% ...
Given:
Principal,
P = 5000
Rate,
r = 4%
Time,
n = 12 months
Or,
= 1 year
To find:
The CI = ?
Solution:
⇒ 
By substituting the values, we get
hence,
The CI will be:
= 
= 
= 
Thus, the correct answer is "200".
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The present value of annuity of Rs. 5000 per annum for 12 years at 4% ...
Given: Annuity payment (PMT) = Rs. 5000, Number of years (n) = 12, Compound Interest (CI) rate (r) = 4%
We need to find the present value of the annuity.
Formula used: The formula to calculate the present value of an annuity is:
PV = PMT × [(1 - (1 + r)^-n) / r]
Where PV = Present Value, PMT = Annuity payment, r = Compound Interest rate, n = Number of years
Calculation:
Substituting the given values in the formula, we get:
PV = 5000 × [(1 - (1 + 0.04)^-12) / 0.04]
= 5000 × [(1 - 0.49718) / 0.04]
= 5000 × 12.05445
= Rs. 60,272.25
Therefore, the present value of annuity of Rs. 5000 per annum for 12 years at 4% p.a C.I. annually is Rs. 60,272.25.
Answer: none of these.
We need to find the present value of the annuity.
Formula used: The formula to calculate the present value of an annuity is:
PV = PMT × [(1 - (1 + r)^-n) / r]
Where PV = Present Value, PMT = Annuity payment, r = Compound Interest rate, n = Number of years
Calculation:
Substituting the given values in the formula, we get:
PV = 5000 × [(1 - (1 + 0.04)^-12) / 0.04]
= 5000 × [(1 - 0.49718) / 0.04]
= 5000 × 12.05445
= Rs. 60,272.25
Therefore, the present value of annuity of Rs. 5000 per annum for 12 years at 4% p.a C.I. annually is Rs. 60,272.25.
Answer: none of these.
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The present value of annuity of Rs. 5000 per annum for 12 years at 4% p.a C.I. annually isa)Rs. 46000b)Rs. 46850c)RS. 15000d)none of theseCorrect answer is option 'D'. Can you explain this answer?
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