 Hello friends and how are you all doing today? The question says what sum will buy an annual annuity of a piece 120 payable half yearly for two years at 7% per annum. We need to use the value of 1.035 raised to the power minus 4 as 0.8718. Let us discuss this question simultaneously. Well, we are given R that is the periodic payment towards this annual annuity as a piece 120. We are given the rate of interest as 7% per annum. That implies it will be 7 upon 2% half yearly, right? And we are given the time that we take as n as 2 years or it will be 2 into 2 that is 4 half years. We need to find out its value, the value of this annuity it will be R bracket 1 minus 1 plus R raised to the power minus n upon R. This is the formula that we are required to follow. We just need to substitute the value of these three in this formula. So we have v equal to 120 1 minus 1 plus R that will be 0.1 plus 0.035 raised to the power minus n that is minus 4 upon again R that is 0.035. Here we have changed this percentage as it can be written as 0.035, isn't it? Now we have v equal to 120 bracket 1 minus 1.035 raised to the power minus 4 upon 0.035. Its value is given to us already in the question. We just need to substitute that. So we have 120 bracket 1 minus 0.8718 upon 0.035 which on simplification gives us 120 into 1 minus 0.8718 is 0.1282 upon 0.035 which further gives us value as rupees 439.54. Hence the sum is rupees 439.54. So hope you enjoyed the session and understood the whole concept. Do take care of your calculations and have a nice day.