Question

Find the amount of an annuity of Rs. 400 per quarter payable for 6 years at 8% p.a.
[Given : $(1.02{)}^{24}=1.608$]-

• A. Rs. 11,260
• B. Rs. 12,160
• C. Rs. 13,200
• D. None.

Answer 1

The correct option is B Rs. 12,160

Formula for calculating the amount of an annuity,

$F=R\frac{{(1+\frac{r}{m})}^{m\times n}-1}{\frac{r}{m}}$

$F=400\frac{{(1+\frac{8/100}{4})}^{4\times 6}-1}{\frac{8/100}{4}}$

$F=400\frac{{(1+\frac{8}{100}\times \frac{1}{4})}^{24}-1}{\frac{8}{100}\times \frac{1}{4}}$

$F=400\frac{(1.02{)}^{24}-1}{\frac{1}{50}}$

$F=12,160$