alleryPresent value of an annuity of Rs.1000 per year for 2 years at 10% per annum is
ARs.2000.00
BRs.1900.00
CRs.1800.00
DRs.1735.54
Answer & Solution
Correct answer: D. Rs.1735.54
1. PV of annuity = A * [(1 - (1 + r)^-n) / r].
2. (1.10)^-2 = 1/1.21 = 0.8264.
3. PV factor = (1 - 0.8264)/0.10 = 1.7355.
4. PV = 1000 * 1.7355 = 1735.54.
_Source: ICAI BoS Foundation Paper 3, Ch 4 'Math of Finance', p.15_
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