Question

Let a person invest a fixed sum at the end of each month in an account paying interest 12%

per year compounded monthly. It the future value of this annuity after the 12th payment is

Rs 55,000 then the amount invested every month is?​

Answer 1

Given :

The rate of interest = 12% compounded monthly

Future value of amount = Rs 55,000

Number of payments = 12

To Find :

The Amount invested each month

Solution :

Future value = Present value × $(1+\dfrac{rate}{12 \times 100}) ^{time \times 12}$

Or, Rs 55,000 = P  × $(1+\dfrac{12}{1200}) ^{1 \times 12}$

Or, Rs 55,000 = P  × $(1.01) ^{12}$

Or, Rs 55,000 = P  × 1.126

∴                    P = $\dfrac{55,000}{1.126}$

i.e Present value = P = Rs 48845.4

Thus, Amount invested every month = $\dfrac{48845.4}{12}$

                                                             = Rs 4070.45

Hence, The Amount invested invested by person every month is Rs 4070.45    Answer

Answer 2

Step-by-step explanation: