Question

What is the amount of annuity(approximately) due of Rs 100 yearly payable half yearly for 15 years at 10 % compound interest per annum half yearly.

• A. 3491
• B. 1456
• C. 5434
• D. 2341

Answer 1

The correct option is A 3491

$r=\frac{10\%}{2}=5\%,n=2\times 15=30,A=Rs.100$

Amount of annuity due payable half yearly

$=\left(1/2\right)\frac{A}{r}\times (1+r)\times \left[\right(1+r{)}^n-1]$

$=\left(1/2\right)\frac{100}{0.05}\times (1+0.05)\times \left[\right(1+0.05{)}^{30}-1]=Rs.3488\approx Rs.3491$