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Asked by Soumya Last Modified
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Cost 10%(r) = since quarterly then i divide by 4 ( as 4 quarters). Thus, 10%/4 = 2.5%. as interest will be compounded. Number of years(n) = 2, to multiply by 4. Hence 2*4 = 8 as 8 times the payments will be made in 2 years. annuity amount (A) = 1000 (assuming to be an ordinary annuity). PV of annuity = A*[(1+r)^n-1/r(1+r)^n] = Rs. 7170.1372
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