PRC-2 · Chapter 5 · Question 11 of 50
Mr. Zaid plans to deposit Rs. 2,000 at the end of each year for 5 consecutive years into an account paying 8% compounded annually. What is the total accumulated future value?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rs. 11,733.20
Explanation
Using the FV of an ordinary annuity formula: FV = R * [(1 + i)^n - 1] / i. FV = 2000 * [(1.08)^5 - 1] / 0.08. FV = 2000 * [1.4693 - 1] / 0.08 = 2000 * 5.8666 = Rs. 11,733.20.
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