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Time Value of Money Ques

The document contains 8 questions related to time value of money calculations. The questions involve calculating future and present values of investments, pensions, loans and savings given interest rates, inflation rates and time periods.

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harryworld
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52 views1 page

Time Value of Money Ques

The document contains 8 questions related to time value of money calculations. The questions involve calculating future and present values of investments, pensions, loans and savings given interest rates, inflation rates and time periods.

Uploaded by

harryworld
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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IBS -2012-2014 SECTION L Time value of money 1. A wants to invest Rs 10000 for a period of 5 years in a fixed deposit at 7.

5% interest per annum. What is the amount he would receive at the end of the tenure? 2. B is going to retire soon.He has 2 options: a) A lumpsum amount of Rs 40000 and b) an annual pension of Rs 10000 as long as he lives.Th e pension money can be reinvested at 9%.Which option would be best for him if he expects to live for another 20 years? 3. C would be receiving Rs 10000 at the end of the first year ,Rs 15000 at the end of second year and Rs 20000 each year from the third year to the fifth year. What is the present value of receipts assuming discount rate of 9% 4. Ann wants to invest an amount of rs 25000 for a period of 7 years in a bank @ 9% per annum.What is the value of the investment at the end of the period? What is the value of his investment at the end of the period keeping the inflation rate of 5% in view? 5. L , would receive pension of rs 12000 per year for 8 years and rs 48000 thereafter.What is the present value of the income stream if discount rate is 10% 6. You want to buy a house after 5 years when it is expected to cost Rs 2 million.How much should you save annually if your savings earn a compound return of 12% 7. You want to take a trip to the moon which costs Rs 1000000.The cost is expected to remain unchanged in nominal terms.You can save annually Rs 50000 to fulfil your desire.How long will you have to wait if your savings earn an interest of 12 % 8. Suppose a firm borrows Rs 10,00,000 at an interest rate of 15% and the loan is to be repaid in 5 equal instalments payable at the end of each of the next 5 years. Calculate the annual instalment payment .

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