Chapter: Insurance and Annuity· Mathematics & Statistics (Commerce) Part 2

A person wants to create a fund of ₹ 6,96,150 after 4 years at the time of his retirement. He decides to invest a fixed amount at the end of every year in a bank that offers him interest of 10% p.a. compounded annually. What amount should he invest e…

Q.5 (A) (i) A person wants to create a fund of ₹ 6,96,150 after 4 years at the time of his retirement. He decides to invest a fixed amount at the end of every year in a bank that offers him interest of 10% p.a. compounded annually. What amount should he invest every year? [Given \((1.1)^4=1.4641\)]

Doubtly Asked 29 Oct 2026 Board exam · July 2025 hsc 12th Save WhatsApp Report

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Answer: ₹ 1,50,000 every year

This is an immediate annuity with accumulated value \(A=696150\), \(n=4\), \(r=10\%\), so \(i=0.1\).

\(A=\frac{C}{i}\left[(1+i)^n-1\right]\)
\(\therefore 696150=\frac{C}{0.1}\left[(1.1)^4-1\right]=\frac{C}{0.1}(0.4641)=4.641\,C\)
\(\therefore C=\frac{696150}{4.641}=150000\)

He should invest ₹ 1,50,000 at the end of every year.

Doubtly AI · 29 Oct 2026 AI-verified · Nov 2026 Report

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A person wants to create a fund of ₹ 6,96,150 after 4 years at the time of his retirement. He decides to invest a fixed amount at the end of every year in a bank that offers him interest of 10% p.a. compounded annually. What amount should he invest e…

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