XY Company is thinking of creating a sinking fund to retire its Rs 800,000 preference share capital that matures on 31 December 19X8. The company plans to put a fixed amount into the fund at the end of each year for eight years. The first payment will be made on 31 December 19X1, and the last on 31 December 19X8. The company expects that the fund will earn 12 per cent a year.

What annual contribution must be made to accumulate to Rs 8,00,000 as of 31 December 19X8?

What would be your answer if the annual contribution is made in the beginning of the year, the first payment being made on 31 December 19X0?