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Question
Find the amount at the end of 12 years of an annuity of ₹ 5,000 payable at the beginning of each year, if the money is compounded at 10% per annum. [(1.1)12 = 3.1384]
Solution
Here a = 5000, i = 10% = `10/100` = 0.1, n = 12
Amount A = `(1 + "i") "a"/"i" [(1 + "i")^"n" - 1]`
= `(1 + 0.1) 5000/(10/100) [(1 + 0.1)^12 - 1]`
= (1.1) 50000 [(1.1)12 – 1]
= 55000 [3.1384 – 1]
= 55000 [2.1384]
= ₹ 1,17,612
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