Time value of money

765 views 4 replies

Dear All,

             My Question Is A Makes A Deposit Of Rs. 5000 In A Bank Which Pays 10% Interest  

             Compounded Annually For 6 Years.You Are Required To Find Out The Amount To Be

             Received After 5 Years.

             Thanks And Regards.

Replies (4)

you are asking after 5 years or 6 years. anyways

after 5 years - 8053

after 6 years - 8858

Dear Ashish,

                    This Question Is Given In PCC Module.I Also Used The SameFormula

                    An = P (1 +i)  power n ..I Got the Same Answers.

                   ..But In Module The Answer Is Given As Below :-

                      FV = PV (1 + i )  power n

                      FV = 5000 (1 + 10% ) power 6

                            = 5000*7.716^

                  ^from table of compounded value of an annuity.

                              ..In My Opinion This Would Be Done When Rs. 5000 Deposited 

                               Every Year.But In This Question It Seems Tht 5000 Deposited 

                               In Initial Year Only.

                               ...And It Is Also Confusing Whether To Use 6 Years Or 5 Years?            

                         

 


 

there could be some mistake in module. dont worry

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