Material for PGPSE participants of AFTERSCHOOOL CENTRE FOR SOCIAL ENTREPRENEURSHIP. PGPSE is an entrepreneurship oriented programme, open for all, free for all.

1. ANNUITY QUESTIONS FOR APTITUDE TESTS by : DR. T.K. JAIN AFTERSCHO ☺ OL centre for social entrepreneurship sivakamu veterinary hospital road bikaner 334001 rajasthan, india www.afterschoool.tk mobile : 91+9414430763

2. Life of a machine=20years, new machine would cost 780000, sinking fund has to be created for replacement. Scrap value=20000, interest = 14% suggest annuity ? Amount=annuity/r((1+r)^n – 1) 760000=a/.14 * ((1.14)^20 – 1) a=106400/12.8 =8350 per annum answer.

3. Find present worth of annuity of 1000 per annum for 14 years. Interest rate : 10%, Present worth=annuity/rate (1- (1+rate)^-n) =1000/.1 * (1-(1.1)^-14) =7367 answer.

4. 400000 to be paid on monthly instalments in 3 years, rate 15%, payment in the beginning of the month, find instalment Present value=annuity/rate (1+rate)(1-(1+rate)^-n rate = 15/(12*100) = .0125 400000=a/.0125 * (1.0125)(1-(1.0125)^-36) =13695 answer

5. Rishi buys a TV in 48000 on instalments. 8000Downpayment and remaining in 15 instalments. Rate : 18%. find annual instalment Present value=annuity/rate (1+rate)(1-(1+rate)^-n rate = 18/(100) = .18 40000=a/.18 * (1-(1.18)^-15) = 7856 answer

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