Question

shyam deposits Rs 5000 every year for next 3 years at 6% semiannual compounding. calculate the future value if investment?

Answer 1

900 is the answer i think

Answer 2

Given details:

Here, Deposit amount per year (R) = Rs.5000

Term of investment  = 3 years

Interest rate = 6%

Solution:

Since, compounding is done semi-annually,

No. of annuity (n) = 3 * 2 = 6

Interest rate will be calculated at (i) = 0.06 / 2 = 0.03

Future Value of Investment FV = R [ (1+i)^n - 1 ] / i

FV = 5000 * [ (1+0.03)^6 - 1 ]  / 0.03

     = 5000 * 0.1941 / 0.03

FV = 5000 * 6.47 = 32350

Future value of investment is Rs.32,350