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  • Tute2 TVM

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    vivek patel
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    1. The document outlines several cash flow scenarios and investment/loan questions. It includes cash flows for a machinery purchase over 10 years, calculations to determine the present value of an annuity and amounts needed to be deposited, savings needed over 10 years for education costs, and loan amortization schedules. 2. It also includes questions about savings programs starting at different ages and earning compound interest until retirement at age 65 to determine who would be better off financially. 3. The final question is about an account with compound interest where deposits were missed on some birthdays, to calculate the amount in the account on a person's 20th birthday.

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    Tute2 tvm

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    Tute2 tvm

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    1. The document outlines several cash flow scenarios and investment/loan questions. It includes cash flows for a machinery purchase over 10 years, calculations to determine the present value of an annuity and amounts needed to be deposited, savings needed over 10 years for education costs, and loan amortization schedules. 2. It also includes questions about savings programs starting at different ages and earning compound interest until retirement at age 65 to determine who would be better off financially. 3. The final question is about an account with compound interest where deposits were missed on some birthdays, to calculate the amount in the account on a person's 20th birthday.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    Download as doc, pdf, or txt
    8 views1 page

    Tute2 TVM

    Uploaded by

    vivek patel
    1. The document outlines several cash flow scenarios and investment/loan questions. It includes cash flows for a machinery purchase over 10 years, calculations to determine the present value of an annuity and amounts needed to be deposited, savings needed over 10 years for education costs, and loan amortization schedules. 2. It also includes questions about savings programs starting at different ages and earning compound interest until retirement at age 65 to determine who would be better off financially. 3. The final question is about an account with compound interest where deposits were missed on some birthdays, to calculate the amount in the account on a person's 20th birthday.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    Download as doc, pdf, or txt
    of 1

    Tute 2 Q1 A company is considering purchase of machinery that is expected to provide Cash flows as follows: Yr 1 Yr % Yr $ Rs2200 Rs1%00 Rs1%00 Yr 2 Rs!

    200 Yr & Rs1%00 Yr 10 Rs1%00 Yr ! Yr ' Rs2"00 Rs1%00 Yr # Rs2$00 Yr " Rs1%00

    (f the annual discount rate is 1!) what is the present value of this cash*flow stream+ Q,2, -hat amount must .e deposited today in order to earn a perpetual annual income of Rs, 10000 .eginning from the end of 20 years from now+ /he deposit earns 10) per year, 0Ans, 1&!%01 Q,!, 2r, 3inay plans to send his son for higher studies a.road after 10 years, 4e expects the cost of these studies to .e Rs, 2%0 000, 4ow much should he save annually to have a sum of Rs, 2%0 000 at the end of 10 years if the interest rate is 10 per cent+ Q# 5sta.lish loan amortisation schedules for the following loans to the nearest paise: a1 A 10*year mortgage loan of Rs1"#000 at a 10) compound annual interest rate with e6ual installment payments at the end of each year

    Q% 2r, 7han has decided to start saving for his retirement, 8eginning on his 21 st .irthday 7han plans to invest Rs2000 each .irthday into a savings investment earning a ') compound annual rate of interest, 4e will continue this savings program for a total of 10 years and then stop ma9ing payments, 8ut his savings will continue to compound at ') for !% more years until 7han retires at age &%, 2r, Anu: also plans to invest Rs2000 a year on each .irthday at ') and will do so for a total of !% years, 4owever he will not .egin his contri.utions until his !1 st .irthday, 4ow much will 2r, 7han;s and 2r, Anu:;s saving programs .e worth at the retirement age of &%+ -ho is .etter off financially and .y how much+ 0Ans, 1"%#21 Q& -hen you were .orn your dear aunt promised to deposit Rs1000 in a savings account for you on each and every one of your .irthdays .eginning with your 1 st, /he savings account .ears a %) compound annual rate of interest, You have :ust turned 2% and want all the cash, 4owever it turns out that dear 0forgetful1 aunt made no deposits on your % th 'th and 11th .irthdays, 4ow much is in the account now < on your 2%th .irthday+ 0Ans, #0&"'1

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