SSC BOARD PAPERS IMPORTANT TOPICS COVERED FOR BOARD EXAM 2024

Future Value of A Series Of Payments

Future Value  of A Series Of Payments : -
Calculate the Future value at the end of 5 years of the following series of payment at 10%   rate of interest.
R1  = Rs.1000 at the end of 1st year
R2  = Rs.2000 at the end of 2nd  year.
R3  = Rs.3000 at the end of 3rd  year.
R4  = Rs.2000 at the end of 4st year.
R5 = Rs. 1500 at the end of 5th year
V = R1(1+i)n-1 + R2(1+i)n-2 + R3 (1+i)n-3 + R4 (1+i)n-4 + Rn
=  1000(1+.10)5-1 + 2000(1+.10)5-2 + 3000(1+.10)5-3 + 2000(1+.10)5-4 + 1500
=  1000(1.10)4 + 2000(1.10)3 + 3000(1.10)2 + 2000(1.10)1  + 1500
=   1000(1.464)+2000(1.3310)+3000(1.21)  +2000(1.10) +1500
= 1464 + 2662 +3630 +2200+1500
Vn = 11456

Another Method : -
Using Compounding Factor Table
 End of year Amt of payment No. of yrs compounded Compounded Interest factor Future value 1 1000 4 1.464 1464 2 2000 3 1.331 2662 3 3000 2 1.210 3630 4 2000 1 1.100 2200 5 1500 0 1 1500 11456

Future value of  the end of 5 years = 11456