How much does the shop owner pay into the van…

How much does the shop owner pay into the van fund over the 4 years?

Question 19

EasyOriginal question

A shop owner wants ₹5,00,000 in 4 years to buy a new delivery van. She puts an equal sum into a fund at the end of each year, earning 8% a year compounded yearly. (Take $(1.08)^{4} = 1.36049$ ; answers to the nearest rupee.)

How much does the shop owner pay into the van fund over the 4 years?

₹56,160Correct answerYour answer₹2,21,920Correct answerYour answer₹4,00,000Correct answerYour answer₹4,43,840Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer D

Correct answer: D

Four deposits of ₹1,10,960.
$4 \times 1{,}10{,}960 = 4{,}43{,}840$ rupees.

Worth noting

₹56,160 is the interest the fund earns, not what she pays in.

Concept: The total paid into a fund
Typical timeTypical: 90 s
Your timeYours: —

The rule this testsSinking funds

Practise this chapter →

Ten questions from Perpetuity, Sinking Funds & Bonds, at your own pace.

Practise this chapter →

Ten questions from Perpetuity, Sinking Funds & Bonds, at your own pace.

How much does the shop owner pay into the van fund over the 4 years?

Question 19

Explanation