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Arsi University: Financial Management Individual Assignment

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19 views4 pages

Arsi University: Financial Management Individual Assignment

Chala documents

Uploaded by

chalademise1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ARSI UNIVERSITY

Financial Management Individual assignment

Name: Chala Demisse Id.no: 12258/14

Submitted to: Dr. Abdi Dhufera

Assela, Ethiopia
1. Assella City’s population is expected to increase at a rate of 5%
per year for the next 10 years. If the current population is
420,000, what is the expected population at the end of the next
ten years?
Pv= 420,000
I= 5 fv=420,000(1+0.05)10
=420,000(1.62889)
= 684,135.7
# after ten years the population of Assela will be 684,135.7 with a
rate of 10% at current population of 420,000.
2. A depositor planned to leave 2,000 birr in a savings account,
paying 7% compound interest semiannually for 5 years. However,
at the end of two years, the depositor had to withdraw 1,000 birr.
What amount will be in the account at the end of the original 5-
year period?
Pv=2000
nt
r
R=7 fv= pv (1+ )
n
4
¿ 2000(1.035)

Fv= 2000( 1.147523)

Fv= 2295.046-1000

=1295.046
6
0.07
¿ 1295.046(1+ )
3

=1295.046(1.22239)

= 1,583.0595
# if a depositor planned to leave 2000 birr with 7% compound interest
seminally for 5 years it will be 1,583.05

3. Find the amount of 10,000 birr invested at 10% for 5 years,


compounded: annually, semiannually, quarterly, and monthly.
( )
nt
r
Annually= fv= p 1+
n
=10,000(1.1)^5
= 10,000(1.61
=16,105.1
Semiannually= 10,000(1.1/2)^10
=10,000(1.62891)
= 16,288.9
Quarterly = 10,000(1.1/4)^20
=10,000(1.63861)
=16,386.16
Monthly= 10,000(1.1/12)^60
=10,000(1.6453)
=16,453.089
4. What is the present value of T-bills with a maturity value of 2,000
birr due in 1 year if money is worth 10% compounded quarterly?
Fv= 2000
n
r
R=10 pv=fv(1+ )
n
4
¿ 2000 ( 1+0.025 )
¿ 2000/1.103812
¿ 1,811.44
# the present value of t bills with maturity value of 2000 is
1,811.44 due in 1 year
5. Find the amount of an ordinary annuity of 15,000 birr per year for
5 years at 3% interest compounded annually.
Pv= 15,000
R= 3 n
fv= pmt (1+i) −1/i¿
=15,000(1+0.03)^5-1/0.03)
=15,000(1.59274-1/0.03)
=15,000(5.30913)
= 79,637.04
# if compounded annually the ordinary annuity of 15,000 for 5
years in a rate of 3% if 79,637.04

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