₹5,000 is put into a sinking fund at the end of every year for 4 years, at 8% a year. How much is in the fund after the fourth deposit? (Take $(1.08)^{4} = 1.3605$.)

Explanation

1. 01

   The fund is the amount of an annuity: $A = R \times \frac{(1 + i)^{n} - 1}{i}$.

2. 02

   $A = 5{,}000 \times \frac{0.3605}{0.08} = 5{,}000 \times 4.50625 = 22{,}531.25$ rupees.