Question

Parag Parikh is going to receive Rs. 2,00,000 today (at t=0) as the result of an insurance settlement. In addition, he will receive Rs. 3,50,000 one year from today and Rs. 5,50,000 two years from today. He plans on saving all of this money and investing it for her retirement. If Parag can earn an average of 12% on her investments, how much will he have in his account if he retires 26 years from today (at t=26)?

Answer 1

Parag will have Rs. 44,68,802 in his account if he retires 26 years from today. This can be calculated by using the formula A = P (1+r)n, where A is the future value of the investment, P is the present value, r is the interest rate, and n is the number of years until retirement. In this case, P = 10,50,000, r = 12%, and n = 26, so A = 10,50,000 (1+0.12)26 = Rs. 44,68,802.