Q3. Mr. X promises Mr. Y to give Rs. 2,00,000/- in cash after 9 years. He has the following two options (a) If Mr. X makes annual payments into a fund after 1 year how much will each have to be if the fund pays 8 %. (b) If Mr. X decides to invest a cumulative amount in the account after 1 year and let it compound annually, then how much will the lump sum? What should Mr. X do?

Q3. Mr. X promises Mr. Y to give Rs. 2,00,000/- in cash after 9 years. He has the following two options (a) If Mr. X makes annual payments into a fund after 1 year how much will each have to be if the fund pays 8 %. (b) If Mr. X decides to invest a cumulative amount in the account after 1 year and let it compound annually, then how much will the lump sum? What should Mr. X do?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 34P

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