BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$32, 000.00
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$37, 278.00
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$42, 240.00
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$36, 240.00
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Detailed explanation-1: -Therefore, the amount received annually through compound interest on Principal = 1000, Rate = 5% and Time = 3 years is Rs. 1, 157.625.
Detailed explanation-2: -We are given that amount of each installment is Rs 500 and we are given that number of installments are 8 quarterly payments. The rate of interest is 8% per annum compounded quarterly. So, we get the present value as Rs. 3662.50.
Detailed explanation-3: -The formula for the future value of an ordinary annuity is F = P * ([1 + I]^N-1 )/I, where P is the payment amount. I is equal to the interest (discount) rate. N is the number of payments (the “^” means N is an exponent). F is the future value of the annuity.
Detailed explanation-4: -Future value is the value of a sum of cash to be paid on a specific date in the future. Therefore, the formula for the future value of an ordinary annuity refers to the value on a specific future date of a series of periodic payments, where each payment is made at the end of a period.