Mathematics of finance

CA Suraj Lakhotia Admin

To solve this, we must determine how much money should be invested for each child now, such that all of them receive the same amount when they turn 25, considering the interest rate of 3.5% per annum compounded annually. Let: Tom is 9 → years to 25 = 16 Dick is 12 → years to 25 = 13 Harry is 15 → years to 25 = 10 Total money left = ₹1,00,000 Let the equal future value that each son will receive be A Using the compound interest formula: Present Value=A/(1+r)^n Compute PV of each son's share. The total should be 100,000 Using this you can get the value of A.