HOW TO FIND ANSWER FOR THIS???

Maths & Stats

I tried finding it by calculating it as: I found f.v. of 50000 i.e. 80525.5. Then I tried to find value of annuity at this amount. But not getting answer. Is my approach correct??

SNEHAL KHANDELWAL

CA Final

★ 8K+

10-Dec-22 23:49

885

Answers (1)

No actual we have to use present value of annuity here. The 1st payment is made at the end of fifth year. Let's take this case as annuity regular. In the regular we made the payment in the next year of getting loan. So add interest for 4 years to 50,000 which will comes to 73,205. At the 4th year the loan is 73,205. It is the present value of the annuity. ( If you have doubt about it, refer example 31, icai module). Now apply the present value of annuity regular, then the answer is 19,311.xxx which is closer to 19,310.

Vijay K

CA Inter

★ 9K+

11-Dec-22 00:18