SSC JE Civil Engineering 23-Mar-2021 Shift 1 Paper

Concept:
Sinking Fund Method:
It is a technique for depreciating an asset while generating enough money to replace it at the end of its useful life. The sinking Fund coefficient(S) for n years is given below the formula
$\mathrm{S}=\frac{\mathrm{i}}{{\left(1+{\mathrm{i}}_5\right)}^{\mathrm{n}}-1}$
Where ${\mathrm{i}}_{\mathrm{s}}$ = interest rate of sinking fund, i = rate of interest, and S = Sinking fund coefficient
Year's Purchase(YP):
It is defined as the capital sum required to be invested in order to receive an annuity of Re 1.00 at a certain rate of interest.
$\mathrm{YP}=\frac{1}{\left(\mathrm{i}+\mathrm{S}\right)}$
Where i = rate of interest, and S = Sinking fund coefficient
Calculation:
Given Data
Rate of interest(I) = 7% = 0.07
Coefficient of annual sinking fund(S) = 0.43
So, Year's Purchase(YP)
$\mathrm{YP}=\frac{1}{\left(\mathrm{i}+\mathrm{S}\right)}=\frac{1}{\left(0.07+0.43\right)}=\frac{1}{\left(0.50\right)}=$2