Question

A person wishes to have a future sum of rs. 10,00,000 for his son's education after 10 years from now. What is the single- payment that he should deposit now that he gets the desired amount after 10 years? The bank gives 15% interest compounded annually.

Answer 1

Step-by-step explanation:

S.I=PTR/100

P=1000000

T=10yrs

R=15%

S.I=1000000×10×15/100

=10,000×15

=15,000

total.num of money after 10yrs=

=15,000×10

=1,50,000

Answer 2

Answer:

The single- payment that he should deposit now so that he gets the desired amount after 10 years is Rs. 2,47,184.7

Step-by-step explanation:

The formula for Present Value of Annuity = $\frac{Future Value}{(1+r)^{n} }$

Where, Future Value = Desired Sum we wanted,

           R = Rate of Return per annum,

           n = number of the year

Given, Future Value = 1000000

          R = 15% p.a      

          n = 10

Putting all the values in the Formula we get

Present Value = $\frac{10,00,000}{(1+0.15)^{10} }$

Present Value =Rs. 2,47,184.7

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