Suppose I want to be able to withdraw Rs. 5,000 at the end of five years and withdraw Rs. 6,000 at the end of six years, leaving a zero balance in the account after the last withdrawal. If I can earn 5% on my balances, how much must I deposit today to satisfy my withdrawals needs?
Answers
Answered by
0
Answer:
₹400 hope it is n... helpful
Answered by
3
PV=FV ×[(1) ÷{(1+r)ⁿ}]
PV = present value
FV = future value
r = rate of return
{n} = number of periods
In first case :-
FV = 5000/
Interest per year = 5%
number of years = 5years
∴ PV ==FV × [(1) ÷{(1+r)ⁿ}]
= 5000 × [{1} ÷ {(1+ 5%)⁵]
=5000×(1/ 1.276281)
=
In second case :-
FV= 6000/
Interest per year = 5%
number of years = 6 year.
∴ PV ==FV × [(1) ÷{(1+r)ⁿ}]
= 6000 × [{1} ÷ {(1+ 5%)⁶]
= 6000 ×( 1/1.340095)
=
Total PV = (391`7.63/) + (4477.29/)
=
Hence 8394.92/ should be deposited that day to satisfy withdrawals needs.
Ans:- Rupees 8394.92 should be deposited that day to satisfy withdrawals needs.
Similar questions