Mathematics of FinanceMCQPYQ Dec 23Question 6591 of 108

Govinda's mother decides to gift him $50,000 $\displaystyle every year starting from today for the next five years. Govinda deposits this amount in a bank as and when he receives and gets $10\%$ per annum interest rate, compounded annually. What is the present value of this annuity? Given $\displaystyle P(4,0.10) = 3.16987$ .

Select Your Answer (Keyboard: A, B, C, D)

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Correct Answer

✅ Option B — $2,08,493.5$

All Options:

A$2,80,493.5$
B$2,08,493.5$ ✓
C$2,08,943.5$
D$2,58,493.5$

Detailed Solution & Explanation

PYQ Dec 23

About This Chapter: Mathematics of Finance

Paper

Paper 3: Quantitative Aptitude

Weightage

12-16 Marks

Key Topics

Simple & Compound Interest, Annuity, Perpetuity

The most important mathematical chapter in the entire syllabus. It covers Simple Interest (SI), Compound Interest (CI), Nominal vs Effective rates, Present and Future Value, Annuities (Ordinary and Due), Sinking Funds, and Perpetuities. The concepts learned here are applied heavily in CA Intermediate and Final.

View Official ICAI Syllabus

Exam Strategy Tip

Guaranteed 12-16 marks. Master your calculator! Learn the 'GT' and compound interest M+/M- tricks to solve annuity questions in 10 seconds without writing long formulas.

Key Concepts to Understand

Annuity

A sequence of equal periodic payments made at equal intervals of time.

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