Question

a company sets aside a sum of rs.5000 annually for 10 years to pay off a debentures issue of rs.60,000. if the fund accumulated at 5% per year compound interest , fund the surplus full redemption of the debentures issue?

Answer 1

Answer:

1. current principal  $60000
2. annual addition    $0
3. year to grow       10
4. interest rate       5%

compound interest 1 time(s)annually

future value $97733.68

compound amount   $97733.68-6000=37733.68

surplus=50000-37733.68=12266.32

Step-by-step explanation:

Answer 2

Answer:

Step-by-step explanation:

Given

P= Principal investment amount = Rs. 5000

T= Tenure = 10 years.

R = Annual Interest Rate = 5% =.05

N=The number of times that interest compounds in a year = 1

Consider

The future value of the investment, including interest  is = A

We know that,

$A = P\times(1 +\frac{R}{N})^{(N\times{T})}\\\\\Rightarrow{A}=5000\times(1+\frac{.05}{1})^{(1\times10)}\\\\\Rightarrow{A}=5000\times(1.05)^{10}=8144$

Therefore, The value of the investment, including interest  is =Rs. 8144

Total amount to pay off = Rs. 60000

To fulfill the value = Rs.(60000-5844)= Rs. 54156 is required.