Renubala deposits Rs. 1200 now, Rs. 800 two years from now and Rs. 1000 five years from now. If the savings bank's rate of interest is 5%, she will receive an amount of Rs. X, 10 years from now, where X is:
Rs. 4413
The key concept here is the time value of money, specifically the future value of an investment earning compound interest. 1000 Time (n3) = 5 years Interest Rate (r) = 0.05 FV3 = 1000 × (1 + 0.05)^{5} FV3 = 1000 × (1.05)^{5} Calculating (1.05)^{5} \approx 1.27628 FV3 = 1000 × 1.27628 \approx 1276.28 Calculating the Total Amount X The total amount Renubala will receive 10 years from now is the sum of the future values of all three deposits at that time. Therefore, the correct answer is Rs. 4413.
Important Questions from Valuation
Calculate the year’s purchase for a property of useful life of 30 years and rate of interest of 5% per annum.
A building has been purchased by a person at a cost of Rs. 25,000. The useful life of the building is 40 years and the scrap value of the building is Rs. 3,000. Calculate the annual sinking fund (Rs.) at the rate of 5% interest. (Take 1.0540 = 7.04)
The junk or demolition value of a structure, calculated at the end of its utility span, that has lost all of its structural strength and is near to its demolition is called:
X is the measure and adjustment of price levels for goods and services across a broad sector of the economy, where X is:
In which of the following cases, valuation is not required?
