Question 1

If you deposit Rs. 800000 into an account earning 12% interest compounded quarterly, how much would you have in
Data:
PV -800000
Rate 12% Adj. Rate 0.03
NPER 5 Adj. NPER 20
Compound Quarterly
Solution: FV $1,444,889

Question 2
How much would you pay for an investment which will be worth Rs. 780,000 in three years? Assume interest is 9%.
Data:
FV 780000
Rate 9%
NPER 3
Solution: PV ($602,303)

Question 3
You have Rs.1000,000 to invest at 8% interest. If you wish to withdraw equal annual payments for 7 years, how much
Data:
PV -1000000
Rate 8%
NPER 7
Solution: PMT $192,072

Question 4
If your company borrows Rs. 1300,000 at 7% interest and agrees to repay the loan in 10 equal semiannual payments t
Data:
PV -1300000
Rate 7% Adj. Rate 0.035
NPER 10
Solution: PMT $156,314

Question 5
You deposit Rs.17,000 each year for 10 years at 7%. Then you earn 9% after that. If you leave the money invested for
Data:
PMT -17000
NPER 10 Then After 10 Years NPER 5
Rate 7% Rate 9%
Solution: FV $234,880
This is actually PV for the coming years
PV ($234,879.62)
Solution: FV $361,391
Question 6
If you deposit Rs. 90000 in a bank account and then keep on depositing Rs. 14000 each year for the next 12 years, wh
Data:
PV -90000
PMT -14000
NPER 12
Rate 8%
Solution: FV $492,315

Question 7
Arshad Mali has Rs. 42,180.53 in a brokerage account, and he plans to contribute an additional Rs. 5,000 to the accou
Data:
PV -42180.53
PMT -5000
Rate 12%
FV 250000
Solution: NPER 11

Question 8
If you put Rs. 5000 in the stock market, how many years would it take you to triple your money if the market is maki
Data:
PV -5000
Rate 12%
FV 15000
Solution: NPER 10

Question 9
If you put Rs. 10 away at the end of each month for the next 40 years at a 12% simple annual interest rate, how much
Data:
PMT -10
NPER 40 Adj. NPER 480
Rate 12% Adj. Rate 0.01
Solution: FV $117,648.00
If Annuity Due,
Solution: FV $118,824

Question 10
If you borrow Rs. 150,000 for a house at 8% simple annual interest rate for 15 years, what is your monthly payment?
Data:
PV -150000
Rate 8% Adj. Rate 0.006667
NPER 15 Adj. NPER 180
Solution: PMT $1,433

Question 11
How long would it take to accumulate Rs. 50,000 if you started putting Rs. 5 in the bank every month starting now at
Data:
FV 50000
PMT -5
Rate 7.30% Adj. Rate 0.006083
Solution: NPER 679
If Ordinary Annuity
Solution: NPER 680

Question 12
Your parents are planning to retire in 18 years. They currently have Rs. 250,000, and they would like to have Rs. 1,00
Data:
NPER 18
PV -250000
FV 1000000
Solution: Rate 8%

Question 13
An investment pays you Rs. 100 at the end of each of the next 3 years. The investment will then pay you Rs. 200 at th
Data:
Cashflows
100 Rate 8%
100
100
200
300
500
PV $924 ($923.98)
Solution: FV $1,466

Question 14
Washington-Atlantic invests Rs. 4 million to clear a tract of land and to set out some young pine trees. The trees will
Data:
PV -4000000
NPER 10
FV 8000000
Solution: Rate 7%

Question 15
Assume that you inherited some money. A friend of yours is working as an unpaid intern at a local brokerage firm, an
Data:
Cashflows
50 Cost $900
50 Rate 8%
50
1100
Solution: PV $937

Question 16
Assume that your father is now 50 years old, that he plans to retire in 10 years, and that he expects to live for 25 years
Data:
PV -100000
Rate 8%
NPER 10
Solution: PMT $14,903

Question 17
What is the future value of a 5-year ordinary annuity that promises to pay you Rs. 300 each year? The rate of interest
Data:
NPER 5
PMT -300
Rate 7%
Solution: FV $1,725

Question 18
Find the amount to which Rs. 500 will grow under each of the following conditions: a. 12 percent compounded annua
Data:
PV -500
(a).
Rate 12%
NPER 5
Solution: FV $881
(b).
Adj. Rate 0.06
Adi. NPER 10
Solution: FV $895
(c).
Adj. Rate 0.03
Adi. NPER 20
Solution: FV $903
(d).
Adj. Rate 0.01
Adi. NPER 60
Solution: FV $908

Question 19
Find the present value of Rs. 500 due in the future under each of the following conditions: a. 12 percent nominal rate,
Data:
FV 500
Rate 12%
NPER 5
(a).
Adj. Rate 0.06
Adi. NPER 10
Solution: PV ($279)
(b).
Adj. Rate 0.03
Adi. NPER 20
Solution: PV ($277)
(c).
Adj. Rate 0.01
Adi. NPER 60
Solution: PV ($275)
how much would you have in 5 years?

ears? Assume interest is 9%.

yments for 7 years, how much could you withdraw each year and leave Rs.0 in the investment account?

equal semiannual payments to include principal plus interest, how much would those payments be?

leave the money invested for another 5 years how much will you have in the 15th year?
year for the next 12 years, what will be the ending value of these investments if the interest rate is 8%.

ditional Rs. 5,000 to the account at the end of every year. The brokerage account has an expected annual return of 12 percent. If A

r money if the market is making 12% a year?

nnual interest rate, how much money would you end up with? What if you started at the beginning of each month?

hat is your monthly payment?

k every month starting now at a simple annual interest rate of 7.3%? What if you started at the end of each month?

ey would like to have Rs. 1,000,000 when they retire. What annual rate of interest would they have to earn on their Rs. 250,000 in

will then pay you Rs. 200 at the end of Year 4, Rs. 300 at the end of Year 5, and Rs. 500 at the end of Year 6. If the interest rate ea

ung pine trees. The trees will mature in 10 years, at which time Washington-Atlantic plans to sell the forest at an expected price o

n at a local brokerage firm, and her boss is selling some securities that call for 4 payments, Rs. 50 at the end of each of the next 3
he expects to live for 25 years after he retires, that is, until he is 85. He wants a fixed retirement income that has the same purcha

ach year? The rate of interest is 7 percent.

12 percent compounded annually for 5 years. b. 12 percent compounded semiannually for 5 years. c. 12 percent compounded qua
ns: a. 12 percent nominal rate, semiannual compounding, discounted back 5 years. b. 12 percent nominal rate, quarterly compoun
eturn of 12 percent. If Arshad’s goal is to accumulate Rs. 250,000 in the account, how many years will it take for Arshad to reac
n on their Rs. 250,000 in order to reach their goal, assuming they save no more money?

r 6. If the interest rate earned on the investment is 8 percent, what is its present value? What is its future value?

st at an expected price of Rs. 8 million. What is Washington-Atlantic’s expected rate of return?

nd of each of the next 3 years, plus a payment of Rs. 1,050 at the end of Year 4. Your friend says she can get you some of these s
hat has the same purchasing power at the time he retires as Rs. 40,000 has today (he realizes that the real value of his retirement

ercent compounded quarterly for 5 years. d. 12 percent compounded monthly for 5 years.
rate, quarterly compounding, discounted back 5 years. c. 12 percent nominal rate, monthly compounding, discounted back 1 yea
take for Arshad to reach his goal?
get you some of these securities at a cost of Rs. 900 each. Your money is now invested in a bank that pays an 8 percent nominal
value of his retirement income will decline year by year after he retires). His retirement income will begin the day he retires, 10
, discounted back 1 year.
s an 8 percent nominal (quoted) interest rate, but with quarterly compounding. You regard the securities as being just as safe, and
in the day he retires, 10 years from today, and he will then get 24 additional annual payments. Inflation is expected to be 5 percen
as being just as safe, and as liquid, as your bank deposit, so your required effective annual rate of return on the securities is the sa
expected to be 5 percent per year from today forward; he currently has Rs. 100,000 saved up; and he expects to earn a return on
on the securities is the same as that on your bank deposit. You must calculate the value of the securities to decide whether they ar
pects to earn a return on his savings of 8 percent per year, annual compounding. To the nearest dollar, how much must he save du
decide whether they are a good investment. What is their present value to you?
w much must he save during each of the next 10 years (with deposits being made at the end of each year) to meet his retirement g
to meet his retirement goal?