Mathematics for FinanceMTP Apr 21Question 1320 of 512
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If A person invests 5,000\displaystyle 5,000 in a three years' investment that pays 12%\displaystyle 12\% per annum. Calculate the future value of the investment.

Options

A7024.64\displaystyle 7024.64
B7124.78\displaystyle 7124.78
C7324.48\displaystyle 7324.48
D7526.48\displaystyle 7526.48
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Correct Answer

✅ Option a — 7024.64\displaystyle 7024.64

All Options:

  • A7024.64\displaystyle 7024.64
  • B7124.78\displaystyle 7124.78
  • C7324.48\displaystyle 7324.48
  • D7526.48\displaystyle 7526.48

Detailed Solution & Explanation

**Derivation of Future Value** Given: - Principal (P\displaystyle P) = Rs. 5,000\displaystyle \text{Rs. }5,000 - Rate of Interest (r\displaystyle r) = 12%\displaystyle 12\% per annum - Time (t\displaystyle t) = 3\displaystyle 3 years **Step 1: Calculate the future value (A\displaystyle A)** A=P(1+r)tA = P(1 + r)^t A=5000(1+0.12)3A = 5000(1 + 0.12)^3 A=5000(1.12)3A = 5000(1.12)^3 A=5000×1.404928=Rs. 7,024.64A = 5000 \times 1.404928 = \text{Rs. }7,024.64 Hence, **Option A** is the correct answer.

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