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Math Help - Questions Part 1

  1. #1
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    Questions Part 1

    help me by Choosing the Correct answer:

    Question # 1
    If you plan to accumulate Rs. 30, 0000 after 10 years from now, what will you need to invest this year if you earn 8% interest compounded semi annually?

    a) 30, 0000(1 + 0.08)10
    b) 30, 0000(1 + 0.08)20
    c) 30, 0000 [1/(1+0.04)20]
    d) 30, 0000 [(1 + 0.08)20 -1]/0.08

    Question # 2
    You want to buy an ordinary annuity that will pay you Rs. 4,000 a year for the next 20 years. You expect annual interest rates will be 8 percent over that time period. The maximum price you would be willing to pay for the annuity is closest to

    a) Rs. 32,000.
    b) Rs. 39,272
    c) Rs. 40,000
    d) Rs. 80,000

    Thanks

    Azhar
    Last edited by mr fantastic; March 29th 2009 at 02:15 AM. Reason: Moved to new thread
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