What is the future value of an ordinary annuity consisting of three annual payments of Rs. 1,000 at 10% interest?
Correct answer: C. Rs. 3,310
- A. Rs. 3,000
- B. Rs. 3,100
- C. Rs. 3,310
- D. Rs. 3,641
Explanation
For an ordinary annuity, payments occur at the end of each period. The value is 1,000[(1.10)³ − 1] ÷ 0.10, giving Rs. 3,310; Rs. 3,641 is the corresponding annuity-due value.
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