CA Foundation · Quantitative Aptitude · Mathematics of Finance
Ananya deposits ₹10,000 at the end of every year for 3 years in an account paying 10% per annum compounded annually. What will be the accumulated amount at the end of 3 years?
The accumulated amount is ₹33,100. For an ordinary annuity, future value equals the payment times ((1.1)^3 − 1)/0.1, which is 10,000 × 3.31. Deposits at year end earn interest for 2, 1 and 0 years respectively.
- A₹33,100Correct
- B₹36,410
- C₹30,000
- D₹34,000
Explanation
FV = P[(1+i)^n - 1]/i = 10,000 × 0.331/0.1 = ₹33,100. Check: 12,100 + 11,000 + 10,000 = 33,100. ₹36,410 is the annuity-due value, which applies only if deposits are made at the start of each year.
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