Q1

Ans. NPV

sammi annual installment $9.8415 million

in one years 2 installment will be pay that equal to ($9.8415 mill

intererst rate 3.6%

Discount the annuity as usual 30yr

$ million
19.683million * 30yr AF

Annuity factor 30yr at rate 3.6% :

1-(1+r )^-n/r

A.F for 30y 18.16376

$, milloion
NPV 357.5173

Q2
(i)

A= total loan amount

D.F= (1-(1+r)^-n/r
Periodic Interest Rate (r) = Annual rate (converted to decimal figu
Number of Periodic Payments (n) = Payments per year multiplied

A = $5000
n = 48 (12 monthly payments per year x 4 years)
r = 0.00525 (a 6.3% rate converted to 0.063, divided by 12 paymen
D.F 42.33195

Monthly pa 118.11
 $118.11 monthly payment

(ii)

Payment No. Payment Amount

$
1 118.11
2 118.11
3 118.11
4 118.11
5 118.11
6 118.11
7 118.11
8 118.11
9 118.11
10 118.11
11 118.11
12 118.11
13 118.11
14 118.11
15 118.11
16 118.11
17 118.11
18 118.11
19 118.11
20 118.11
21 118.11
22 118.11
23 118.11
24 118.11
25 118.11
26 118.11
27 118.11
28 118.11
29 118.11
30 118.11
31 118.11
32 118.11
33 118.11
34 118.11
35 118.11
36 118.11
37 118.11
38 118.11
39 118.11
 40 118.11
41 118.11
42 118.11
43 118.11
44 118.11
45 118.11
46 118.11
47 118.11
48 118.11

(iii) Principal is the initial amount that you bond to pay back. Interest is the
Every month, the loan will be charged interest on the outstanding principal 

(iv) $
Total Interest 669.50

Q3

Tala’s investment 25years from now

interest Rate is 9%
investment amount is $2,000

F=P(1+r)6n

F.V 17246.16

Jassem’s Investment

To find How much money should he invest now in order to have the same amount

Present Value=Future value*(1+r)^-n

$
Present Value 3177.6

Jassem’s Invest $3177.60 today to earn same amount of money in 25years as Tala

Q4
 Dividend

Formula:
S.Price = Dividend/ Ke

Ke 0.0525

Share price $63

Fromula reverse
Dividend = Share price * Ke

Dividend $3.31

Q5

Formula:
value of stock = Do(1+g)/(Ke-g)

avg ke 13.00%
growth 4.50%

Dividend AED 2.65

stock price 32.58

 19.683

onverted to decimal figure) divided by number of payment periods

ents per year multiplied by number of years

0.063, divided by 12 payments per year)

Interest Amount Principal Reduction Remaining Balance
$ $ $
26.25 91.86 4908.14
25.77 92.34 4815.80
25.28 92.83 4722.97
24.80 93.31 4629.66
24.31 93.80 4535.85
23.81 94.30 4441.56
23.32 94.79 4346.76
22.82 95.29 4251.47
22.32 95.79 4155.68
21.82 96.29 4059.39
21.31 96.80 3962.59
20.80 97.31 3865.29
20.29 97.82 3767.47
19.78 98.33 3669.14
19.26 98.85 3570.29
18.74 99.37 3470.93
18.22 99.89 3371.04
17.70 100.41 3270.63
17.17 100.94 3169.69
16.64 101.47 3068.22
16.11 102.00 2966.22
15.57 102.54 2863.68
15.03 103.08 2760.60
14.49 103.62 2656.99
13.95 104.16 2552.83
13.40 104.71 2448.12
12.85 105.26 2342.86
12.30 105.81 2237.05
11.74 106.37 2130.68
11.19 106.92 2023.76
10.62 107.49 1916.28
10.06 108.05 1808.23
9.49 108.62 1699.61
8.92 109.19 1590.42
8.35 109.76 1480.66
7.77 110.34 1370.33
7.19 110.92 1259.41
6.61 111.50 1147.91
6.03 112.08 1035.83
 5.44 112.67 923.16
4.85 113.26 809.89
4.25 113.86 696.03
3.65 114.46 581.58
3.05 115.06 466.52
2.45 115.66 350.86
1.84 116.27 234.59
1.23 116.88 117.71
0.62 117.49 0.22
669.50

o pay back. Interest is the cost of borrowing of the principal. Interst charge on the initial amount of the loan.
n the outstanding principal balance of the loan. Initially, most of each loan payment will be applied to interest charges, not the

der to have the same amount of money in 25 years as Tala’s

nt of money in 25years as Tala’s

ing Balance
unt of the loan.
o interest charges, not the principal, so the loan balance will decrease slowly.