A person started keeping aside 10,000 each year for his child's college education in a sinking fund. The amount he will receive after 6 years, if the rate of interest is 10% p.a., is : [Use $(1.1)^6=1.771$]
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 77,100
$S=R×\frac{(1+i)^n-1}{i}$
$R = 10,000$ (Annual deposit)
$i = 0.1$ (interest rate per year)
$n = 6$ (number of years)
$S=10,000×\frac{(1.1)^6-1}{0.1}=10,000×(1.771-1)×10$
$=1,00,000×0.771=77,100$