[amp_mcq option1=”Rs 315.25″ option2=”Rs 331.01″ option3=”Rs 99.49″ option4=”Rs 318.25″ correct=”option1″]
The correct answer is A. Rs 315.25.
The future value of an annuity is the total amount of money that will be accumulated at the end of a period of time if a fixed amount of money is deposited at regular intervals and earns a fixed interest rate.
In this case, the deposited value is Rs 100 and the interest rate is 5%. The annuity is ordinary, which means that the deposits are made at the beginning of each period.
The formula for the future value of an ordinary annuity is:
$FV = A\left(1 + r\right)^n$
where:
- $FV$ is the future value
- $A$ is the amount of each deposit
- $r$ is the interest rate
- $n$ is the number of periods
In this case, we have:
- $A = 100$
- $r = 0.05$
- $n = 3$
Substituting these values into the formula, we get:
$FV = 100\left(1 + 0.05\right)^3 = 315.25$
Therefore, the future value of the annuity is Rs 315.25.
Option B is incorrect because it is the future value of an annuity due, which means that the deposits are made at the end of each period. Option C is incorrect because it is the present value of the annuity. Option D is incorrect because it is the future value of the annuity if the interest rate is 6%.