allerySinking fund deposit at end of each year to accumulate Rs.10000 in 5 years at 8% per annum equals approximately
ARs.1705
BRs.1800
CRs.2000
DRs.1500
Answer & Solution
Correct answer: A. Rs.1705
1. SFV = D * [((1.08)^5 - 1) / 0.08] where D is annual deposit.
2. (1.08)^5 = 1.4693, so factor = (0.4693/0.08) = 5.867.
3. 10000 = D * 5.867.
4. D = 10000/5.867 = 1704.6, approximately Rs.1705.
_Source: ICAI BoS Foundation Paper 3, Ch 4 'Math of Finance', p.16_
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