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    Time Value of Money 01092020

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    Kritika
    The document discusses time value of money concepts including compound interest, present value, annuities, and loan amortization. It provides examples of calculating future and present values over different time periods and interest rates as well as determining equal loan payments.

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    Time Value of Money 01092020

    Uploaded by

    Kritika
    5 views1 page
    The document discusses time value of money concepts including compound interest, present value, annuities, and loan amortization. It provides examples of calculating future and present values over different time periods and interest rates as well as determining equal loan payments.

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    © © All Rights Reserved

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    The document discusses time value of money concepts including compound interest, present value, annuities, and loan amortization. It provides examples of calculating future and present values over different time periods and interest rates as well as determining equal loan payments.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    5 views1 page

    Time Value of Money 01092020

    Uploaded by

    Kritika
    The document discusses time value of money concepts including compound interest, present value, annuities, and loan amortization. It provides examples of calculating future and present values over different time periods and interest rates as well as determining equal loan payments.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Time Value of Money

    1. A firm deposited Rs 55,650 in a bank which was paying a 15% rate of


    interest on a ten year time deposit, how much would the deposit grow at the
    end of ten years?
    2. Suppose a firm deposits Rs 5,000 at the end of each year for four years at
    6% rate of interest, how much would this amount accumulate at the end of
    the fourth year.
    3. Find out the compound value of Rs 1,000, interest rate being 12 percent if
    compounded annually, semiannually, quarterly and monthly for 2 years.

    4. Suppose an investor wants to find out the present value of Rs 50,000 to be


    received after 15 years. Interest rate being 9%.

    5. A person receives an annuity of Rs 5,000 for four years. If the rate of interst
    is 10 percent, find out the present value of this annuity.

    6. Assume that an investor expects a perpetual sum of Rs 500 annually from


    his investment. What is the present value of this perpetuity if interest rate is
    10 percent.
    7. Consider that an investor has an opportunity of receiving Rs 1,000, Rs
    1,500, Rs 800, Rs 1,100 and Rs 400 respectively at the end of one through
    five years. Find out the present value of this stream of uneven cash flows, if
    the investors required interest rate is 8 percent.
    8. Suppose you have borrowed a 3 year loan of Rs 10,000 at 9 percent from
    your employer to buy a motorcycle. If your employer requires three equal
    end of year repayments, then calculate the annual instalment. Also prepare a
    schedule for loan amortization.

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