Multiple choice

A school is planning to purchase a bus worth Rs. 5,00,000 after 4 years. They have planned to make savings right from this year. Calculate the yearly savings they are required to make to purchase the bus, if the return on investment is 12%. (Take annuity table value up to 3 places.)

  1. Rs. 1,03,210

  2. Rs. 1,04,624

  3. Rs. 1,20,000

  4. Rs. 1,21,630

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The value of annuity of Re. 1 every year @12% for 4 years is 4.779. Thus, 5,00,000/4.779 = Rs. 1,04,624