If three annual payments of Rs. 1,000 are made at the beginning of each year at 10%, what is their value at the end of the third year?
Correct answer: C. Rs. 3,641
- A. Rs. 3,310
- B. Rs. 3,410
- C. Rs. 3,641
- D. Rs. 3,900
Explanation
Beginning-of-year payments form an annuity due. Its value is the ordinary annuity value multiplied by 1.10, so Rs. 3,310 × 1.10 equals Rs. 3,641.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
Practise Financial Mathematics: Interest, Annuities and Discounting
30 free Financial Mathematics: Interest, Annuities and Discounting MCQs from Quantitative Methods, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Quantitative Methods questions like this
Quantitative Methods is on this paper prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for it.
More Financial Mathematics: Interest, Annuities and Discounting questions
A loan of Rs. 10,000 is repaid by three equal annual payments of Rs. 4,021.15 at 10% interest. Which type of repayment does this represent?
What effective annual rate corresponds to a nominal annual rate of 12% compounded monthly?
A perpetuity pays Rs. 12,000 at the end of every year. If the discount rate is 8%, what is its present value?
A bill of Rs. 10,000 is discounted at a simple discount rate of 8% for 9 months. What proceeds are received?
What is the total amount of Rs. 8,000 invested at simple interest of 6% per annum for 2.5 years?
What is the amount after one year on Rs. 10,000 at a nominal rate of 8% per annum compounded quarterly?