Find PV
of an annuity of ₹12000 received at the end of 4 years if the ROI is 10%
To find the Present Value (PV) of an annuity, you can use the PV of Annuity formula, which is:
PV = A * (1 - (1 + r)^(-n)) / r
Where:
PV = Present Value
A = Annuity Payment
r = Interest Rate per Period
n = Number of Periods
In this case, the annuity payment is ₹12,000, the ROI (Interest Rate) is 10%, and the annuity is received at the end of 4 years. So we have:
A = ₹12,000
r = 10% = 0.10 (converted to decimal)
n = 4
Now, plug these values into the formula and calculate:
PV = ₹12,000 * (1 - (1 + 0.10)^(-4)) / 0.10
Solving this equation will give you the Present Value (PV) of the annuity.