Question 15 Marks
Anil plans to send his daughter for higher studies abroad after 10 years. He expects the cost of the studies to be ₹ 2,00,000. How much must he set aside at the end of each quarter for 10 years to accumulate this amount, if money is worth 6% compounded quarterly? [Given: (1.015)40 = 1.8140]
Answer
$
\begin{array}{l}
FC=P \times\left(\frac{(1+r)^{n t}-1}{r}\right) \\
2,00,000=P \times\left(\frac{(1+0.015)^{4 \times 10}-1}{0.015}\right)
\end{array}
$
Now, calculate the value inside the parentheses:
$
\begin{array}{l}
(1.015)^{40}-1=1.8140-1=0.8140 \\
2,00,000=P \times\left(\frac{0.8140}{0.015}\right)
\end{array}
$
Now, calculate the value inside the second set of parentheses:
$
\frac{0.8140}{0.015} \approx 54.267
$
Now, solve for P:
$
P=\frac{2,00,000}{54.267}
$
$P \approx$ ₹ 3,684.81
So, Anil must set aside approximately ₹ 3,684.81 at the end of each quarter for 10 years to accumulate ₹ 2,00,000 with a 6% quarterly compounded interest rate.
View full question & answer→$
\begin{array}{l}
FC=P \times\left(\frac{(1+r)^{n t}-1}{r}\right) \\
2,00,000=P \times\left(\frac{(1+0.015)^{4 \times 10}-1}{0.015}\right)
\end{array}
$
Now, calculate the value inside the parentheses:
$
\begin{array}{l}
(1.015)^{40}-1=1.8140-1=0.8140 \\
2,00,000=P \times\left(\frac{0.8140}{0.015}\right)
\end{array}
$
Now, calculate the value inside the second set of parentheses:
$
\frac{0.8140}{0.015} \approx 54.267
$
Now, solve for P:
$
P=\frac{2,00,000}{54.267}
$
$P \approx$ ₹ 3,684.81
So, Anil must set aside approximately ₹ 3,684.81 at the end of each quarter for 10 years to accumulate ₹ 2,00,000 with a 6% quarterly compounded interest rate.

