What equal annual deposit is required at the end of each year to accumulate Rs. 50,000 in 5 years at 8% interest?
Correct answer: B. Rs. 8,528.14
- A. Rs. 8,000.00
- B. Rs. 8,528.14
- C. Rs. 9,000.00
- D. Rs. 10,000.00
Explanation
For a sinking fund, the annual deposit is FV × i divided by [(1+i)^n − 1]. Substitution gives 50,000 × 0.08 divided by [(1.08)^5 − 1] = Rs. 8,528.14.
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