AAFM CWM_LEVEL_2 Exam - Topic 7 Question 96 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam

Question #: 96
Topic #: 7

Section A (1 Mark)

Mr. Murli is 55 years old at present. He has invested some amount in an annuity which will pay him begining of the 5th year Rs. 30,000/- p.a. at the beginning of every year for 10 years. Rate of interest is 7% p.a. Calculate how much amount he has invested now?

A172000.04

B169123.09

CC182123.98

D345982.12

Show Suggested Answer

Suggested Answer: B

by Patria at Jan 26, 2025, 03:07 PM

Limited Time Offer

25%

Off

Get Premium CWM_LEVEL_2 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Brandon

8 months ago

Wow, I didn't expect the investment to be that high!

upvoted 0 times

...

Luisa

8 months ago

I think B is the correct choice, did the math myself!

upvoted 0 times

...

Leonie

8 months ago

Wait, how can he invest that much and only get 30k a year?

upvoted 0 times

...

Freeman

9 months ago

I'm pretty sure the answer is A, looks right to me.

upvoted 0 times

...

Serina

9 months ago

The annuity starts paying after 4 years, so keep that in mind!

upvoted 0 times

...

Ocie

9 months ago

I believe we should discount the Rs. 30,000 payments back to the present value using the formula for an annuity. I think the answer might be closer to option A or B.

upvoted 0 times

...

Lai

9 months ago

Wait, does the 7% interest rate apply to the entire period, or just the years after the annuity starts? I’m a bit lost on that part.

upvoted 0 times

...

Mabelle

9 months ago

I remember practicing a similar question where we had to find the present value of future cash flows. I think we might use the formula for annuities here.

upvoted 0 times

...

Tambra

10 months ago

I think we need to calculate the present value of the annuity starting from the 5th year, but I'm not entirely sure how to adjust for the interest rate.

upvoted 0 times

...

Melinda

10 months ago

This seems straightforward enough. As long as I plug the numbers in correctly, I should be able to solve this problem without too much trouble.

upvoted 0 times

...

Leila

10 months ago

Okay, I think I've got this. I'll need to find the present value factor using the interest rate and number of payments, then multiply that by the annual payment amount.

upvoted 0 times

...

Melodie

10 months ago

Hmm, I'm a bit unsure about how to approach this. I'll need to review the formulas for present value of an annuity to make sure I do this correctly.

upvoted 0 times

...

Ronny

10 months ago

This looks like a present value calculation for an annuity. I'll need to find the present value of the future payments using the given interest rate.

upvoted 0 times

...

Camellia

1 year ago

I'm so tired of these annuity questions, they're like the cockroaches of the finance world - they just keep coming back! But hey, at least this one doesn't involve any weird life expectancy calculations. I'm gonna go with B and pray the answer gods are smiling on me today.

upvoted 0 times

Ollie

1 year ago

I know right, annuity questions are the worst. I'm going with D, let's see if luck is on my side.

upvoted 0 times

...

Daryl

1 year ago

I hear you, annuity questions are never-ending. I'm going with C, let's hope for the best!

upvoted 0 times

...

Linsey

1 year ago

I feel you, annuity questions can be a real pain. But hey, at least this one seems straightforward. I'm going with A, fingers crossed!

upvoted 0 times

...

Ernest

1 year ago

OK, time to channel my inner math wizard. Let's see, present value of an annuity, 7% interest, 10 years, 30,000 per year... Bingo! B is the way to go. Now I just need to remember to double-check my work before submitting. Wouldn't want to mess this up and end up with a negative investment amount!

upvoted 0 times

...

Craig

1 year ago

Ugh, annuities always make my head spin. But I'm pretty sure C is wrong - that number is just too random to be right. I'm gonna go with B and hope for the best. Maybe I should have paid more attention in that finance class...

upvoted 0 times

Magda

1 year ago

Yeah, annuities can be tricky. But I'm feeling good about choosing B.

upvoted 0 times

...

Willard

1 year ago

I agree, C does seem like a random number. Let's stick with B.

upvoted 0 times

...

Mammie

1 year ago

I think B is the right answer too. Let's hope for the best!

upvoted 0 times

...

Corrie

1 year ago

Hmm, let me break this down step-by-step. 55 years old, 10-year annuity, 7% interest, annual payments of 30,000. Yep, B is the correct answer for sure. I've got this in the bag!

upvoted 0 times

Alesia

1 year ago

You're all wrong, it's D) 345982.12

upvoted 0 times

...

Lawrence

1 year ago

Actually, I'm pretty sure it's C) 182123.98

upvoted 0 times

...

Colton

1 year ago

No, I believe it is B) 169123.09

upvoted 0 times

...

Casandra

1 year ago

I think the answer is A) 172000.04

upvoted 0 times

...

Ramonita

1 year ago

Whoa, this is a tricky one! Gotta love those annuity questions with the present value calculations. Let me see, I think the answer is B, 169123.09. No way I'm getting that D option, that's way too high!

upvoted 0 times