ASSIGNMENT 3

Financial Management-I
BSC-II
Instructor: Mehvish Umer
Spring Semester 2021

Question 1
Find the following values. Compounding/discounting occurs annually.
a) An initial $500 compounded for 10 years at 6%
b) An initial $500 compounded for 10 years at 12%
c) The present value of $500 due in 10 years at 6%
Question 2
What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk
pay 7% annually?
Question 3
Microsoft earned $0.33 per share in 1997. Ten years later in 2007 it earned $1.42. What was the
growth rate in Microsoft’s earnings per share (EPS) over the 10-year period?
Question 4
If you deposit money today in an account that pays 6.5% annual interest, how long will it take to
double your money?
Question 5
Shalit Corporation’s 2008 sales were $12 million. Its 2003 sales were $6 million. At what rate
have sales been growing?
Question 6
Find the interest rates earned if you borrow $85,000 and promise to pay back $201,229 at the
end of 10 years.