GATE 2026 AR — Planning – Question 62
Invest₹60000 now for₹20000 received at each year-end for 5 years. At 5% annual discount rate, find NPV in rupees to the nearest integer.
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Correct answer: 26400 to 26700
Explanation
Discount each end-of-year receipt: PV=20000×[1−(1.05)^(−5)]/0.05=₹86589.53. Subtract initial investment₹60000 to obtain NPV₹26589.53, rounding to₹26590. The receipts form an ordinary annuity because the first arrives after one year.
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