alleryAn annuity of Rs.500 is paid for 10 years at 10% per annum. The future value is approximately
ARs.7969
BRs.8500
CRs.7000
DRs.9000
Answer & Solution
Correct answer: A. Rs.7969
1. FV of annuity = A * [((1.10)^10 - 1) / 0.10].
2. (1.10)^10 = 2.5937.
3. Annuity factor = (2.5937 - 1) / 0.10 = 15.937.
4. FV = 500 * 15.937 = 7968.7, approximately Rs.7969.
_Source: ICAI BoS Foundation Paper 3, Ch 4 'Math of Finance', p.14_
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