Question

Find the amount of an immediate annuity of 300 in 10 years allowing 5 % p.a. compound interest.
[ Given (1.05) P = 1.629)​

Answer 1

Answer:P = Rs 42000 T=2 years

Let rate = r %

S.I=

100

PRT

​

=

100

42000×r×2

​

=840 Rs

For C.I

A=P(1+

100

r

​

)

n

=42000(1+

100

r

​

)

2

=42000(1+

10000

r

2

​

+

50

r

​

)

=42000+

10

42r

2

​

+840r

C.I = A - P

=42000+

10

42r

2

​

+840r−42000

=

10

42r

2

​

+840r

Given C.I−S.I=105

=

10

42r

2

​

+840r−840r=105

=

10

42r

2

​

=105

=42r

2

=1050

=r

2

=25

r=5%

C.I at 2nd year = 42000(1+

100

5

​

)

2

−42000

=42000(1.1025−1)=4305 Rs

Step-by-step explanation: