Statistics & Applications

Financial Math

Medium

applied

A man wishes to ensure that he gets Rs. 75,000/- at the end of each year indefinitely. The amount that he invest now to produce the desired cash flow, if money is worth 2.5% compounded annually is:

Rs. 30,66,337

Rs. 30,00,000

Rs. 30,45,339

Rs. 30,66,373

✅ Correct Option: 2

The man wants Rs. 75,000 every year indefinitely. This requires finding the investment amount needed now so that the annual interest earned equals Rs. 75,000, while the principal remains intact forever.

For perpetual annual cash flow:

Investment Required $= \dfrac{\text{Annual Amount}}{\text{Interest Rate}}$

$P = \dfrac{A}{r}$

Where:

$P$ = Principal (amount to invest now)

$A$ = Annual cash flow needed = Rs. 75,000

$r$ = Interest rate = 2.5% = 0.025

Given:

Annual cash flow needed $(A)$ = Rs. 75,000

Interest rate $(r)$ = 2.5% = 0.025

$P = \dfrac{A}{r}$

$P = \dfrac{75,000}{0.025}$

Converting for easier calculation:

$0.025 = \dfrac{25}{1000} = \dfrac{1}{40}$

Dividing by $0.025$ is equivalent to multiplying by $40$ :

$P = 75,000 \times 40$

$P = 30,00,000$

Therefore, the amount to invest now is Rs. 30,00,000.

2026: 30 May Shift 1

An electric bike costs ₹42,000 and has a useful life of 10 years. If annual depriciation is ₹3,000, then the scrap value by using linear method of depriciation is:

2026: 18 May Shift 2

Suresh takes a loan of ₹ 4,00,000 with 10% annual interest rate for 5 years on flat rate basis. Which of the following statements are correct ?

A. The total interest on the principal is ₹ 1,00,000.

B. The number of months in loan period is 60.

C. EMI under flat rate system is ₹ 12,000.

D. EMI under flat rate system is ₹ 10,000.

Choose the correct answer from the options given below:

2025: 14 May Shift 2

A person has an initial investment of ₹ 25000 in an investment plan. After 2. years it has grown ₹ 30000, then the rate of return on his investment is

2025: 2 June Shift 1

Maneesh took a loan of ₹ 9,00,800 from bank at an interest rate of 6% per annum for 10 years. If she has to pay the loan back with the help of equal monthly installments (EMI). Then, the EMI using reduced balance method is (approx):

[Given: $(1.005)^{-120}=0.5496$ ]

2025: 15 May Shift 2

A T.V. panel costing Rs 18000 has a useful life of 12 years. If the annual depreciation is Rs 1000, then its scrap value by linear method is:

2026: 31 May Shift 2

Which of the following statements are true about the sinking fund ?

A. In the sinking fund, a fixed amount at regular intervals is deposited.

B. Sinking fund can be used in an emergency.

C. In the sinking fund, any amount, anytime, can be deposited.

D. Sinking fund can be used only for the purpose it was created.

Choose the correct answer from the options given below:

A man wishes to ensure that he gets Rs. 75,000/- at the end of each year indefinitely. The amount that he invest now to produce the desired cash flow, if money is worth 2.5% compounded annually is:

Solution

Related questions:

Keyboard Shortcuts

CUET Mathematics Past Year Questions (Topic-Wise)