Answer to Question #112808 in Economics of Enterprise for Prem

Question

A person who is now 35 years old is planning for his retired life. He plans to invest an equal sum of Rs. 10,000 at the end of every year for the next 25 years starting from the end of the next year. The bank gives 20%interest rate, compounded annually. Find the maturity value of his account when he is 60 years old. ii)Explain Single payment present worth factor in detail

Answer 1

At the end of the accumulation, the account will be filled Rs. 471980.5

The annual deposit of funds is due to the fact that interest is accrued only once a year, therefore, remembering that each country has a different rate of money turnover, but for each country this characteristic is necessarily present, it is not economically feasible to replenish this account more often.