Engineering Economy - Engineering

Q1:

Renu Bala deposits Rs 1200 now, Rs 800 two years from now and Rs 1000 five years from now. If the savings bank's rate of interest in 5%, she will receive an amount of Rs X 10 years from now, where X is

A Rs 3415

B Rs 4225

C Rs 4413

D Rs 4826

ANS:C - Rs 4413

Let's calculate the future value:

FV = 1200 * (1 + 0.05)^10 + 800 * (1 + 0.05)^8 + 1000 * (1 + 0.05)^5,
FV = 1200 * (1.05)^10 + 800 * (1.05)^8 + 1000 * (1.05)^5,
FV = 4412.91,
~Rs.4413.