a) Cash PV annuity factor
=(1–(0.07(1+0.07)251)=(1–(0.075.4271)=0.07(1–0.1842)=0.070.81574=11.6535832
PV (annuity) with payment of Rs.
600000=600000×11.6535832=6992149.92
PV today
(1+0.07)306992149.92=918538.58
b) FV annuity factor
r((1+r)n−1)=0.07((1+0.07)30−1)=0.07((1.07)30−1)=0.07(7.6122−1)=0.076.6122=94.46
A = PV (annuity)/ FV annuity factor
=94.466992149.92=74022.34
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