Answer to Question #216127 in Management for Vicky

Question

Question: Raman plans to lend Rs100000 for a period of 5 years at an interest rate of 12% . How much money should he receive at the end of each year to recover the investment back ?

Answer 1

Money’ future value = present value of money (1+ Rate of interest charged) ^{Number of Years}

100,000 = Present Value (1+0.12)⁵

100.000 = 1.762 Present Value

Present value = 100,000

                            1.762

=56,742.68 Rs

 

Reference

Block, S.B., Hirt, A. and Danielsen, B., 2013. Foundations of financial management with time value of money card (p. 685). Mcgraw Hill Higher Education.