6.

Deposit amount in Rs. 1000 No.of years of deposit

Interest rate 8% 10%
Value of the deposit after 5 years 1,469 1,611

6.2
Amount of deposit today Rs. 5,000
Maturity amount Rs. 160,000
Interest rate 12%
Doubling period in years
No.of doubling periods required to reach the maturity amount
No.of years needed to get the maturity amount

6.3
Amount of deposit today Rs. 1000
Perod of deposit (in years) 12
Amount promised at the end of the period. Rs. 8,000
No.of doubling periods required to reach the promised amount
Doubling period in years
Interest rate in percentage terms as per the rule of 69
6.4
First period of savings ( in years) 5
Amount of savings at the end of each year during the first
period Rs. 2,000
Second period of savings ( in years)commencing from the end
of the first period 10
Amount of additional savings at the end of each year during
the second period
Rs. 1,000 at fifth year
Rate of interest on the savings 10% ₹12,210.20
Ammout of accumulated savings at the end of the second
period Rs. #VALUE!

6.5
No.of years after which the higher studies begin 10
Amount needed for the studies at the time of joining Rs. 1,000,000
Interest rate on the savings 12%
Annual savings required to accumulate the needed amount Rs. -321,973
 6.6
Perod of deposit ( in years) 6
Amount to be deposited at the end of each year Rs. 1,000
Amount promised to be paid at the end of the period Rs. 10,000
Interest rate implicit in the offer 46.78%
6.7
Amount to be paid today Rs. 1,000
Amount promised to be repaid after the period Rs. 5,000
Length of the period ( in years) 10
Rate of interest implicit in the offer
6.8
No.of years after which the amount will be received 8
Amount of receipt Rs. 10,000
If the interest rate is 10.00% 12%
Present value of the receipt

6.9
Period of the annuity( in years) 5
Amount of the annuity Rs. 2,000
Rate of interest 10%
Present value of the annuity Rs.

6. 10
First choice
Life expectancy ( in years) 15
Amount of annual pension during the life time Rs. 10,000
Rate of interest 15%
Present value of the pension as per the first choice Rs.
Present value of the pension as per the second choice Rs. 50,000

6. 11
Amount of deposit Rs. 100,000
Interest payable on the deposit 10%
Period of deposit (in years) 30
Balance to be left in deposit at the end of the withdrawal
period Rs. 0
Equal amounts withdrawable at the end of each year Rs.

6.12
Length of the first period ( in years) 1
Amount to be received at the end of the first period Rs. 1,000
Length of the second period ( in years) commencing from the
end of the first period 1
Amount to be received at the end of the second period Rs. 2,500
Length of the third period ( in years) commencing from the
end of the
Amount to second period
be received at the end of each of the third period 8
Rs. 5,000
Rate of discount 12%
Present value of the income stream Rs.

6.13
Length of the first period ( in years) 5
Amount to be received at the end of each year of the first
period Rs. 2,000
Length of the following period ( in years) infinity
Amount to be received at the end of each of the infinite
period Rs. 3,000
Rate of discount 10%
Present value of the income stream

6.14
Annual income to be received from the end of year 15
Amount of annual income for ever Rs. 5,000
No. of years for which the annual income to be received infinity
Rate of discount 10%
Amount to be deposited today to earn that income

6.15
Amount of deposit to be made Rs. 20,000
Annual amounts of repayment from the end of the first year
Rs. 4,000
No. of years of repayment 10
Interest earned on the deposit

6.16
Discount rate 12%
End of year Stream A Stream B
1 100 1000
2 200 900
3 300 800
4 400 700
5 500 600
6 600 500
7 700 400
8 800 300
9 900 200
 10 1000 100
Present value

6.17
Amount of deposit Rs. 10,000
Rate of interest 16%
No. of times compounding is done in an year 4
Period of deposit ( in years) 5
Amount to which the deposit will grow Rs.

6.18
Amount of deposit Rs. 5,000
Period of deposit ( in years) 5
Rate of interest 12%
No. of times compounding is done in an year 4
Maturity value of the deposit Rs.

6.19
A B
Stated rate 12% 24%
Frequency of compounding (times) 6 4
Effective rate
Difference between the effective rate and the stated rate

6.20
Income stream to commence from the beginning of year 10
Annual income forever Rs. 12,000
Rate of interest 12%
Amount of investment required now Rs.

6.21
The amount to be received now according to the first choice
Rs. 5,000
The amount to be received according to the second choice
Rs. 20,000
Period in which the amount would be received according to the
second choice (in years) 10
Implied interest rate of the second choice, if it were equivalent
to the first choice

6.22
Amount deposited now Rs. 10,000
Period of deposit ( in years) 10
Rate of interest 10%
Frequency of compoundig in an year 2
Maturity value of the deposit Rs.
Inflation rate 8%
Maturity value of the depost for the same period , taking into
account the inflation rate Rs.

6.23
Period of deposit (in years) 10
Maturity amount required at the end of the period Rs. 50,000
Interest rate 12%
Amount of equal annual deposits needed each year at the
beginning of an year Rs.

6.24
Period of annual receipt from the beginning of year 2025
to the beginning of year 2029
Amount of each annual receipt Rs. 20,000
Period of annual deposit from the end of year 2015
to the end of year 2020
Interest rate 12%
Amount of each deposit Rs.

6.25
No.of years after which the first receipt occurs 10
Amount of each receipt at the end of each year Rs. 2,000
No.of annual receipts 30
Discount rate 10%
Present value of the receipts Rs

6.26
Period after which the pension is receivable (in years) 5
Amount of pension per month Rs 6,000
No. of years for which pension will be received 15
Interest on loan 12%
Loan instalment as a proportion of the pension amount 30%
Amount that can be borrowed now Rs.

6.27
Bank loan amount Rs. 60,000
Instalment amount Rs. 3,000
No.of instalments 24
Period of each instalment (in years) 1/12
Interest rate charged by the bank per month

6.28
Amount of debentures to be retired each year Rs. 1,000,000,000
Annual debentures retirement to commence from the end of
year 8
Annual debentures retirement to end on year 10
Equal annual deposits in a sinking fund for the next (years) 5
Interest rate 8%
Annual deposit needed in the sinking fund Rs.

6.29
Amount deposited in the bank Rs. 1,000,000
Amount to be withdrawn at the end of each year Rs. 200,000
Interest rate 10%
No.of years in which the entire amount can be withdrawn

6 .30
Interest rate 14%
Loan amortisation schedule

Year Beginning amount Annual instalment

1
2
3
4

6.31
Loan amount Rs. 1,500,000
Equal annual instalment Rs. 200,000
Interest rate 13%
maturity period of the loan (in years)

6.32
Quantity of iron ore to be mined (in tons) 100,000
Period of mining ( in years) 15
Expected price per ton at the end of year 1 Rs. 3,000
Increase in price per year 6%
Discount rate 16%
Present value of the iron ore that can be mined Rs.

6.33
Interest rate 10%
Choice a: Amount receivable now Rs.
Choice b: Amount receivable Rs.
Period in which the amount is receivable (in years)
Present value of the choice b
Choice c: Amount receivable annually for ever Rs.
Present value of the choice c Rs.
Choice d: Amount receivable annually Rs.
Period in years for which the amount would be received
Present value of the choice d Rs.
Choice e: Amount receivable after one year Rs.
Increase in the amount receivable every year for ever
Present value of the choice e Rs.
Choice e has the highest present value of Rs.700,000

6.34
Income(net) that will be generated in the coming year Rs. 120,000,000
Increase in cash flows per year -3%
Discount rate 12%
a. Period of use of the pipeline infinity
Present value of the cash flows Rs.
b. Period of use of the pipeline( in years)
Present value of the cash flows Rs.

6.35
Oil production in an year ( in barrels)
Period of production of the oil (in years)
Increase in oil production per year
Increase in oil prices per year
Current price of the oil per barrel $
Discount rate
Growth rate in the value of the oil produced
Present value of the oil production $

6.36
Oil production in an year ( in barrels)
Period of production of the oil (in years)
Increase in oil production per year
Increase in oil prices per year
Current price of the oil per barrel $
Discount rate
Growth rate in the value of the oil produced
Present value of the oil production $

6.37
Amount saved last year Rs
Increase in annual savings expected per year
Further period of savings( in years)
Interest rate on investment of savings
Amount of savings at the end of the savings period Rs.
 6.38
No of weeks in an year (assumed) 52
Interest rate on deposit offered by the bank 8%
Frequency of compounding in an year
Effective interest rate

6.39

No.of times the deposit multiplies itself

No. of years for doubling
No. of times compounding done in a year
The implied interest rate

6.40
Interest rate 9.50%
Loan amortisation schedule

Year Beginning amount Annual instalment

1
2
3
4
5

6.41
(Amounts in Rs.)
Salary at the end of the first year
Rate of annual increment
Proportion of the salary to be saved

Target savings amount

Bank interest
No.of years waiting to reach target
No.of years he has to wait
6.42
(Amount in Rs.)
Salary expected at the year end
Annual growth rate of salary
Rate of interest on investment
No.of years for which salary will be received
Corpus needed at the end of 20 years
PV of the needed corpus
Amount to be saved in the first year to attain the corpus
Future value of the growing annuity
Percentage of annual savings

6.43
Amount of borrowal Rs.
Period of borrowal in years
Actual amount received Rs
EAR

6.44
Interest rate that makes me indifferent btwn the options
Plan A
Period of annuity in years
Annuity amount Rs.
PV of the annuity Rs.
Plan B
Annuity amount for ever Rs.
PV of the annuity Rs.
Excess of PV of Plan A over that of Plan B Rs.

6.45
Payment at the end of every block of years
is Rs.
No.of years for which the annuity runs
Continuous discounting interest rate
Interest rate for a block of 4 years
PV of the annuity
o.of years of deposit 5
12% 15%
1,762 2,011

at 10 years later period

₹79,482.39
15%
Stream C
500
500
500
500
500
500
500
500
500
500

C
24%
12
 Principal Remaining
Interest repayment balance
 Principal Remaining
Interest repayment balance
 2 3 4
8,000 9,000 8,000

Principal Remaining
Interest repayment balance
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