A Multinational company creates a sinking fund by setting a sum of ₹12,000 annually for 10 years to pay off a bond issue of ₹72,000. If the fund accumulates at 5% per annum compound interest, then the surplus after paying for bond is:

(Use (1.05)¹⁰ ≈ 1.6)

₹72,000

The correct answer is Option (3) → ₹72,000

$\text{Annual deposit }=12000,\;n=10,\;r=0.05.$

$\text{Amount of sinking fund }=12000\frac{(1.05)^{10}-1}{0.05}.$

$(1.05)^{10}\approx1.6.$

$\text{Amount }=12000\frac{1.6-1}{0.05}=12000\cdot\frac{0.6}{0.05}=12000\cdot12=144000.$

$\text{Bond to be paid }=72000.$

$\text{Surplus }=144000-72000=72000.$

$\text{Surplus after paying bond }=72000.$